This study was conducted on the effects of debt financing on profitability of Commercial Banks inrnEthiopia. For this purpose, sample of eight commercial banks was studied from all commercialrnBanks engaged in commercial banking activates. The study period covered twelve years from thernyears (2002-2013). The dependent variable is return on asset (ROA) used to measure thernprofitability of commercial banks and the independent variable are debt to asset ratio, debt tornequity ratio and interest coverage ratio to measure the level of debt on capital structure of therninstitution. To ensure the accuracy of the results of the regression model used one controlrnvariable that is firm size. To address the main objectives of this study and to collect accuraterninformation mainly used secondary data. Primary data was used to support the secondary data.rnAs the result, the research approaches are mixed research approach. The data analyzed by usingrnpanel data analysis technique. The descriptive statistics and the correlation analysis wererndiscussed, followed by the diagnostic test, which is necessary to fulfilling the assumption of thernclassical linear regression model. Then, a fixed effect regression output result was presented andrnthe results of the regression outputs were discussed. Finally, discussion result indicates that allrnindependent variables had positive relationship with profitability and statistically significant.rnKeywords: Debt Financing, profitability, return on asset, debt to asset ratio, debt to equity ratio,rninterest coverage ratio and firm size