The purpose of this study was to identify the Leadership style practiced by principals in Addis Ababa Secondary schools and identify factors that affect leadership styles. To carry out this study a descriptive Survey design was employed. Participants of the study were 132 teachers, 24 principals and 36 student representatives selected by using stratify sampling method and the secondary schools are selected by simple random sampling methods. The data for the study were collected using a questionnaire. The quantitative and qualitative data analysis method were employed the data. Data obtained through questionnaire were analyzed and summarized using statistical tools. The statistics were entered into Statistical package for the Social science (SPSS Version 20.0) soft ware analysis. Statistical measures were performed on quantitative data assembled from the respondents; frequency count, Percentage, mean, standard deviation and also the t-test while qualitative data were analyzed by combined to describe the explanation items of the quantitative data. The findings of the study revealed that the position attainment and qualification of principals were well-matched in those secondary schools. The findings indicate that a democratic leadership style was dominantly employed by secondary school principals but changes depending in the situation in the school. Finally, based on the findings and conclusions, recommendations were made on capacity building and empowering of principals to do their work effectively, in turn, encouraging participatory approach of leadership. Furthermore, Addis Ababa Education Bureau is responsible to give directives and guidelines in the case that whenever shortcomings and gaps to organize trainings, seminars and workshops for school principals on how to use the democratic leadership style effectively in their schools based on the situation and to enhance their capacity.