This study was conducted to evaluate comparatively the project performance of domestic andrnChinese contractors with regard to key performance indicators. The scope of the study was limited tornexamine the performance of road construction projects in the road sector development program ofrnphase IV. The study had developed its research framework through the non-probability samplingrntechnique particularly the purposive or judgmental sampling methods. Accordingly first, it assessedrn13 Federal road projects executed either by the domestic or the Chinese contractors. Subsequently,rnthe overall performance of both domestic and Chinese contractorâ€™s was low. It was stronglyrnassociated with design related problems, unexpected ground conditions, right of way relatedrnproblems, variation order and finally poor contractorsâ€™ capacity respectively. Besides, the keyrndifferences between domestic and Chinese contractors, was found resource capacity. Generally, inrnboth the domestic and Chinese contractors there was low performance during the construction of thernfederal road projects due to internal and external factors. Finally, the study had also developedrnimprovement interventions based on the findings; to solve the internal problems of the contractors,rnthere should be a joint venture between the domestic and Chinese/foreign contractors. EthiopianrnRoad Authority should also solve as much as possible the external factors that affects thernperformance of both the domestic and Chinese contractors during the construction of the federal roadrnprojects.rnKey words: Domestic and Chinese Contractors, Federal Road Projects, Key Performance Indicators,rnand Performance.