This paper attempts to analyze the impact road infrastructure may have on the level and degreernof grain market integration on selected Ethiopian markets. Using wholesale price series of sixrnmarkets and based on monthly data from January 1996 to December 2005, which isrndisaggregated in the pre and post construction periods, one of the major staple food crops ofrnthe country, white wheat i s analyzed. The other two major crops, tiff and maize were alsornconsidered in the descriptive analysis.rnA threshold autoregressive (TAR) Model in the form of Error Correction Model is used tornevaluate the level of integration and speed of adjustment towards equilibrium. The findings ofrnthe paper show that there is enough evidence to conclude that the deficit areas are isolatedrnfrom Addis while the surplus areas were found to be well integrated in both periods. Some ofrnthe markets under consideration are found to be inefficient as smaller deviations than thernthreshold level from the long term equilibrium tend to be cleared (arbitraged) away; the resultsrnalso show that the markets under consideration, could be clustered in to three market groups,rnthat is the surplus areas including Addis, in one group and the two deficit areas each in otherrngroups independently, isolated from Addis. The findings imply that any agricultural grainrnmarketing policy should realize and be aimed at these three segregated groups, separately. Thernresults suggest that geographic differences and distance are important factors affecting spatialrnmarkets integration between Addis and the regional markets. The results also propose, thernrequirement of government intervention mechanisms, such as availability of informationrn(access to local media and telecommunications facilities), as key factors to improve spatialrnmarket integration between the markets. Moreover, as construction of roads alone hasn't asrnsuch improved and produced a significant impact on the level of market integration, the resultsrnindicate the need for a coordinated effort of the other market enhancing instruments; marketrninformation and institutions and put forward a system of commodity exchange as a mechanismrnthat can incorporate these instruments.rnKey words: Market integration, threshold level, Monte Carlo simulations, wheat, andrnconstruction of roads.