Entrepreneurship has played an important role in economic growth, innovation, competitiveness and in poverty alleviation. This study investigated the degree of Entrepreneurial Orientation (EO) of twenty five manufacturing Small and Medium scale Enterprises (SMEs) in Hambantota District, Sri Lanka (HDSL) and the effects of EO dimensions including proactiveness, innovativeness, and risk taking to business performance. Interviews were used as the main instrument for data collection. Qualitative and quantitative techniques were applied for data analysis. Findings showed about 52% of SMEs in HDSL represented moderate level of EO. Proactiveness, innovativeness, risk taking and overall EO were significantly correlated with market share growth. Results further indicated there were positive correlations among proactiveness and EO with business performance. This study could be useful for policy makers to plan their activities towards entrepreneurship development of SMEs in HDSL.