The main objective of this study was to investigate factors that affect the business performance of MSEs that currently working in Addis Ababa City Administration. This study was employed a descriptive and explanatory research design and quantitative research approach. Both primary and secondary data was employed. Questionnaire was that main data collection instrument. Among 9795 MSE operators, 384 sample size were selected using stratified and simple random technique. After the data has been collected, it was analyzed using simple statistical techniques. The descriptive and inferential statistical tools were used, Pearson correlation and multiple linear regression were used to analyze the relationship and difference between independent and dependent variables. Statistical Package for Social Science (SPSS) version 26 was used to analysis of quantitative data from questionnaire questions. Furthermore, the research finding shows that among the independent variables financial factors, infrastructural factors, access to business information service problems and institutional coordination problems were the major factors that significantly affect the performance of MSEs. Based on the findings the study was recommended that financial institutions such as banks and micro finance institutions should improve access to finance problems of MSEs operators, all other governmental institutions/bodies/ should give attention and should improve access to infrastructural, access to business information service and institutional coordination problems in order to improve the performance of MSEs in Addis Ababa.rnKeywords: Micro and Small Enterprises (MSE), performance, factors affecting, entrepreneurship, Kirkos and Arada sub-cities, Addis Ababa.