This study attempts to identify the economic base of the leading urban centers of Ethiopia by applying the Index of Surplus Workers model to the 1994 census data. The findings indicate that the country had nine main urban centers where manufacturing was the leading basic economic function in 1994. Addis Ababa, Arba Minch, Aksum, Bahir Dar, Debre Berhan, Fitche, Gondar, Kombolcha and Sodo were the leading industrial towns, with Dire Dawa developing into a major commercial center. Conversely, transport, communication and storage were the most important economic activities in Adama, suggesting that the city is developing as the nation's leading dry port. Public administration is the principal function in most of the older regional urban centers such as Assela, Debre Markos, Harer and Mekele. Primary activities such as agriculture and forestry stood as the leading sources of employment in Kobo, Meki, Kibre Mengist, Butajira and Yirgalem.