This srudy atlempts to see the psycho-social eflecl of social discrimination against craftrnworkers by the sociely in Addis Ababa region. Thus, the focuses of the study are on therndegree of social discrimination craft people faced by the surrounding community, and ifsrnefJect 011 the psycho-social experiences including level of self esteem, sense of inferiorityrnand degree orsocial interaction of craft workers with that ofnon-handicraji group.rnII/ order to attain Ihe objectives of the study, descriptive survey method was employed. Arnsample of eighty three participants who are organized under small scale industries inrnGulele sub city Kebele 16 were taken from polters and weavers association usingrnavailable samplillg technique. Twenty(20) participants were taken ji-om the black smithsrngroup who are working around Kechene using available sampling technique. Thus a totalrnof one hundred seven (J 07) participants were selected ji-om handicraft groups .Inrnaddition a sarnple of 34 subjects were taken randomly ji-om a total population of 178rnhouseholds who are not engaged in craft work in Kebele 14. To col/ect data, two types ofrnque.I'lionnaires, one for non-handicraft and the other for craft groups were developed.rnThe inSlrumenl compleled by sampled handicraft group contains four parts; socialrndiscrimination, sell' esteem, inferiorily and social interaclion i{ems. While the inSlrumenlrnjilled by lIOn-craft group COl1lains items measuring social discrimination. Moreover,rnFocus group discussion for bOlh groups was held 10 collect qualitative data. The datarncollecled through questionnaires were analyzed using by descriptive statistics, Pearsonrncorrelalion coefficient and one-way ANOVA. The qualitative data obtained lhroughfocusrngroup discussion were narrated by supplemenling the quantitative data.rnThefindings a/the study showed that the handicraft workers in Addis Ababa region facernsocial discrimillalion by the surrounding non-craft society. There are social restrictionsrnin various ([Specls: including participation of the group in social events like wedding,rnfill1eral ceremonies and local associations (Edir, Elwb, Mahiber etc). The other way ofrndiscrimination is highlv reflected in restrictions of inter-group marriage. A10reover, therernis Ihe use of derogalorv labeling by the society such as names and phrases which havernnegative conn alii lion towards craft people. The results also revealed thai, socialrndiscrimination signiflc({l1lly aflects lhe level of self esteem, sense 0/ self and socialrnillleraelion o/crc~(i workers with the lIoll-craft cornmunity.