This study examined the bank-specific and macro-economic determinants of Non-performingrnloans (NPLs) of Ethiopian commercial banks. The study adopted a quantitative researchrnapproach. The study uses data collected from the National Bank of Ethiopia, CentralrnStatistical Agency and financial statement of nine commercial banks. Data covers the periodrnfrom 2006-2016. Descriptive and multiple regression analysis employed to analyze thernunbalanced panel data. Findings of the study show that return on equity and capital adequacyrnhave negative and significant impact on NPLs. Whereas, loan loss provision and loan torndeposit have positive significant relationship with NPLs. The finding of this study is importantrnsince once identifying the determinants of NPLs might enable management body to makernappropriate lending policies that prevent the occurrence of NPLs. The study recommended asrnbank managers better emphasize the management of current assets specially loans.rnFurthermore, preferable for commercial banks to concentrate or diversify their credit portfoliornby calculating risk relative to its return in order to increase return on equity and to reduce thernlevel of nonperforming loans. Also the study suggest for future researcher to validate thernconsistency of the result and provide additional results by including other variables likernpriority sector loan, monitory policy and sensitive sectorâ€™s loan.rnKey words: Nonperforming loans, bank specific factors, macroeconomic factors