This study is concerned with the exploration of the effect of institutionalrnfactors on the development of reading interests (RI) of First year students atrnAddis Ababa University (AAU), College of Social Sciences (CSS). The samplernpopulation of the study were 200 students, out of whom 100 were from ruralrnbackground, while 100 from urban background.rnTo obtain the necessary information a questionnaire with 24 items thatrnfocus mainly on exploring the ways in which institutions influence students' RI ,rnand the perception of students about the effect of institutions on their RI wasrnconstructed and administered to the students. A follow-up interview was alsornheld with selected students to consolidate the information secured through thernquestionnaire.rnThe study showed that Freshman Students at AAU, CSS believerninstitutional factors have affected the development of their RI. It was alsornobserved that students believe school and home factors have had the most effectrnon their reading interest development (R ID), followed by community and peerrnfactors, in that order. Nevertheless, the actual assistance students received fromrninstitutions indicated that peers contributed to their RID much more than did otherrninstitutions.rnThe major ways in which institutions influenced the development ofrnstudents' RI were found to be through the provision of materials for leisurernreading at home, school and community; through encouragement and help givenrnby parents, language teachers and peers, and through setting leisure readerrnmodels.rnThe result of the study also revealed the difference between rural andrnurban students in terms of the contribution of assistance from home andrncommunity to their RID to be highly significant. The students from urban settingrnwere better helped than were those from rural. On the other hand, the effect ofrnassistance from school and peers showed no statistically significant differencernbetween the two groups. A further finding was that students believe whether onernis from a rural or an urban background has strong effect on individual's RID.