Considering the empirical and literature debates and gaps on determinant and impact of FDI,rnthe main objective of this study was to investigate the SR and LR determinants and impacts ofrnFDI on the Ethiopian economy on real GDP, Domestic Investment, and Employment. The studyrnused an Autoregressive Distributed Lag Model with a Bound Test for Co-integration inrnanalyzing the multivariate time series data which covers from 1992-2017 in exploring the SR andrnLR relationship of the variables .Findings of the study for the determinants show, in the long run,rndomestic investment, exchange rate, trade openness and human capital have a positivernrelationship with FDI inflows. On the other hand, rate of inflation has a negative relationshiprnwith FDI. In the long run all variables are statistically significant except rate of inflation. In thernshort run, FDI inflow of the previous year has a negative and significant effect on FDI andrnlagged human capital and lagged trade openness are found positive and significant effect on thernFDI inflow. Finding of the study for the impact shows, in the short run and long run FDI inflowsrnhave a positive impact on domestic investment and real GDP. The impact of FDI on employmentrnis positive and highly significant in the long run although it is insignificant in the short run. Thernresults in this study imply the need for proper management of the inflationary pressures on therneconomy which affects FDI inflows negatively. So, the nationâ€™s monetary authorities develop andrnimplement measures that will effectively manage all inflation, and sustained at levels that willrnguarantee increasing the level of inflow of FDI.