This study has attempted to evaluate the determinants of income velocity of money defined as the ratiornOf nominal income to money supply in Ethiopia. Two al1ernanve measures Of Velocity are used namely 'rnVelocity of narrow money and broad money when estimating the Velocity function. velocity is Assumedrnto depend on real income Per capita: inflation rate: currency money ratio: Investment Income ratiornand the price Level.rnin estimating, the long run velocity equations. We have used the Johansson and Juselius ( (1990)rnapproach. First the lime series characteristics the data is established using the ADF test and Foundrnthat all of the Variables are integrated of order one except the inflation Variable which is Excludedrnfrom the tests for co integration. The co integration tests show that velocity (based on Broad and narrowrndefinitions of money) is co integrated with real income Per capita. currency money ratio. Inveslmel1lrnincome ratio and the Price level. The tests for weak erogeneity reveal that except the currency moneyrnratio all of the Variables are found to be weakly exogenous. Based on the tests for coinegration andrnweak exogeneity . We developed the dynamic model treating currency money ratio as an endogenousrnvariable. The estimated error correction models show that real income Per capital and the inflationrnVariable have significant effects on velocity based on both definitions of money. while currency moneyrnratio and investment income ratio are not important determinants. The evidence on the Stability of thernestimated models shows that the income velocity function based on narrow and broad Moneyrndefinitions has remained stable over the Period of study