The study is an attempt to assess the perception of Addis Ababa residents towards tourismrnimpact and its implication to sustainable tourism development. Closed-ended and open-endedrnquestionnaires were developed, and distributed to three hundred residents of the city. Thernmethodological approach of the study was described as a case study of Addis Ababa within thernqualitative and quantitative descriptive survey domains. It was relied on both primary andrnsecondary data. Stratified, proportional quota and purposive sampling procedures were used.rnQualitative and quantitative data analysis methods were employed. Results from the studyrnfinding indicated that tourism development is significantly affected by residents' perception.rnThere is perception difference among the local communities and key tourism stakeholders. Basedrnon the result, negative impacts were less known by the residents. Moreover, there is a linkrnbetween support of tourism development and perception. Furthermore, there is perceptionrndifference across the socio-demographic factors of income, residents' attachment to tourism,rneducation status, religious status, age, residing proximity to tourism concentration areas andrnlength of residency. In addition, respondents perceived economic impacts of tourism favorably,rnfollowed by envirornnental impacts and socio-cultural impacts. Majority of the residents repliedrndon't know for the impact questions. In addition, there is a strong relationship between residents'rnperception of tourism impact with sustainable tourism development. Creating awareness throughrntraining programs, seminars and workshops; and inclusion of tourism concepts in primary andrnsecondary school books were recommended in order to shape and improve the perceptions of thernresidents.rnKey words: perception, tourism impact, sustainable tourism development