The demand for different kinds of naturally occurring construction materials isrnincreasing in areas like the road construction industry. Unfortunately, not all the naturalrnmaterials along the vicinity of road projects are suitable for the proposed constructionrnbecause these materials fail to fulfill the standard quality requirements. One of thesernmaterials are lateritic materials which often do not fulfill the plasticity index (PI);rnCalifornia Bearing Ratio (CBR) and gradation requirements of many agencies for roadrnbase material. Hence, this research was initiated with the motivation of upgrading andrnutilizing the laterite material, which is one of the abundantly available substandardrnmaterials in the Western part of Ethiopia.rnIn this research, the laterites, found along the Assosa – Kurmuk road, were sampledrnand stabilized so that they can be used for the construction of the base layer of allrnstandard roads. The stabilization was done using lime and cement as two alternativernstabilizers. Moreover, cost comparison were also carried out to assess the cost benefitrnof using stabilized laterite road base in lieu of the crushed stone road base in suchrnareas where laterites are available in surplus quantity.rnAccordingly, it was found that both lime and cement stabilized laterites can be used forrnroad base construction. In both the lime and cement stabilization cases, the optimumrnbinder content to meet the Joint US Army and Air Force (1994) strength and durabilityrnrequirements is 10% by weight of the host material. However, the optimum binderrncontents to satisfy the requirements of ERA Standard Technical Specification (2013)rnare 4% and 6% for both lime and cement stabilized laterites, both percent by weight ofrnthe host material. The cost comparison, on the other hand, indicated that based on therncurrent market price during the study period, only the cement stabilized laterite hasrncost benefit against using the crushed aggregates for the road base construction.rnKey words: laterite, cement-stabilization, lime-stabilization, base course, marginalrnquality materials