The unprecedented pace of urbanisation in Addis Ababa has created a sense of urgency tornaddress the agglomeration effect of urban facilities, particularly in social and physicalrninfrastructure of the city. This thesis examines the socio economic trends in Addis Ababa, andrnconsiders alternative responses through the lens of satellite city development in surroundingrntowns of Addis Ababa. It illustrate the positive prospect of satellite city to increasing the socio-rneconomic and physical infrastructure of urban land use, transport and buildings; access tornimproving water, waste management and other facilities. Therefore, in order to address thosernissues, the researcher used primary data collected through structured questionnaire, Keyrninformant interview and referred to secondary source of data. As result, the collected data andrninformation were compiled, analyzed and finally, puts in the form of manageable tornpresentation. Hence, the outcomes of this thesis provides specific attention to urban area tornintroduce the satellite city concept for major towns in the surrounding towns of Addis Ababa andrnthe study highlight the general profile of surrounding towns and also incorporate the briefrnstudy of Gelan, Dukem, Suluta, Burayu, Holeta, Sebeta on the loop around Addis one whichrnserves a significant regional function for northern, southern, eastern and western part of AddisrnAbaba. These towns have important land holdings and resources in the areas and can achievernthe required outcome with an appropriately developed Master Plan . These towns has plannedrnfuture role of the town related functions could be allowed to develop urban infrastructurernfacilities such as transport, housing, health facilities, water, sewerage, drainage and solid wasternmanagement to channelize their future growth and to enhance the sustainability of urbanrninfrastructure. Accordingly, if these town well-articulated as satellite city form at which allrnfacilities will be contained; ranging from economic activity (industry and commerce) and socialrnservices (education, health, house and leisure) It provides citizens more residential area, andrnthereby, improves the living quality of the people and also reflect the image, culture andrnwellbeing of the communities they serve, at the same time they play a dual role by serving bothrnas satellite towns of Addis Ababa and capitals of the rural countries and thereby reduce thernburdens of Addis Ababa in many ways.rnKey words: Satellite City, Urban Development, Surrounding Towns, Addis Ababa