Asphalt pavements deteriorate with traffic and time. Maintenance and overlaying may solve rnminor to medium pavement distress problems. When the condition of a pavement becomesrnbadly deteriorated, rehabilitation of the pavement may become an economic and feasiblernsolution. Rehabilitation of a pavement requires removal of pavement surfaces. CurrentlyrnAddis Ababa city is undertaking various rehabilitation, upgrading, construction of new roadsrnand regular maintenance works for existing road networks, this is basically dependent on thernutilization of natural and industrial resources which enables to produce huge amount ofrnrecycled asphalt pavement. There is an insignificant effort made for the utilization of thisrnused asphalt pavement produced due to lack of technology and specification. rnThis thesis presents a study into the possibilities of using Recycled Asphalt Pavements (RAP)rnas an alternative aggregate and bitumen in new asphalt binder course mixtures. Following therndetermination of the bitumen content, the aggregate gradation of RAP materials, MarshallrnStability tests and moisture susceptibility tests were conducted to evaluate the mechanicalrnproperties of the asphalt binder mixture containing RAP. Besides, cost-benefit analysis wasrnmade to investigate the advantages and disadvantages of partial substitution of RAP asrncompared to the conventional HMA. rnThe experimental and theoretical results presented in this thesis prove that the asphalt binderrncourse mixtures can be successfully produced using RAP material. Moreover, it was foundrnthat Asphalt binder course mixture containing RAP exhibits advantage in terms of costrncompared to the conventional HMA.