Micro and small enterprises are the key for most developed and developing countries’ economy, due to the fact that micro and small enterprises play in creating employment opportunity and supporting large manufacturing companies in the economy. The results of most research studies reveal that, most micro and small enterprises in developing countries especially in Ethiopia have many problems for transformation and growth due to different factors. Thus, this research assess “determinant factors for the transformation micro and small enterprises in to medium level industry in Addis Ababa City Administration” by taking a sample of 74 transformed micro and small enterprises. The objective of the study was to identify the determinant factors for micro and small enterprises transformation in to medium level industry. The results provide evidence that finance access, management know how, market access, support MSEs get, accounting and record keeping is positively and significantly related with average capital growth. Poor infrastructure and is negatively and significantly related with average capital growth but no relationship between technology and average capital growth.