Manufacturing is a key in creating sustainable and strong economy for one nation. In developing countries like Ethiopia, the manufacturing sector faces lots of problems. The identification of the root problem will lead to drawing a better economy structure and policy for the country.rnThis paper examines the effect of continues devaluation of birr which took place since 1999, and its effect on the export performance of textile industry. The research analyzes eighteen years of data from 1999-2017. Secondary data from National Bank of Ethiopia, Ministry of Trade, Ethiopian Textile Development Institute and Central Statics Agency were used throughout the study. The variables identified from literature review to explain the effect of devaluation on the textile industry were real effective exchange rate, real growth domestic product, foreign direct investment, number of person employed, import input expenditure and actual production output of textile industry.rnThe research has provided in detail the effects of devaluation on the export performance of the textile industry hand to hand with other sector specific variables. On the other hand it has briefly state how it will affect production capacity, quality and price of produced products which has a direct implication on GDP and export performance of the sector.rnClassical linear regression model and correlation analysis was used to analyze the data using the econometric package STATA version 14.2 software. The regression analysis showed that from textile sector specific variables, number of person employed and imported input expenditure has shown positive and significant roles on the export performance Ethiopian textile industry. As number of person employed within the sector increases it has a positive direct impact on production output, which is the same for variable import input expenditure. Increase in inputs for instance labor and input materials results increase in output of production. As output in production increases export performance of textile industry also increases. On the other hand independent variable real effective exchange rate has a positive and significant role on export performance of Ethiopian textile industry. As real effective exchange rate increases export goods will be price competitive on global markets. This will be advantageous for Ethiopian textile products to be competitive from other developed countries. The study suggests that well studied implementation of devaluation of Birr will enhance the export performance of textile industry in big scale. Alongside with the production capacity of people employed and managed imported inputs.