Changes are a common phenomenon, which can occur at any stage of a building project. Especially, changes made during construction stages will generate contractual disputes, cost overrun, time delay, compromising quality and frustration to various stakeholders. In current practice, owners do not fully understand the effect of change on contractors and conversely contractors are rarely satisfied with the allocated amount of money by the consultant. This creates conflicts and dispute between parties in the contract. This research identifies the causes of change orders in building construction projects and quantifies its impact on project cost and time overrun. From case study and interviews, a total of 545 change orders were collected from 28 public building construction projects executed by Amhara Building Work Construction Enterprise (ABWCE) and Bahir Dar University (BDU) 100% completed projects from 2005 till 2010 E.C. The extent and cause were ranked accordingly their occurrence and impact on project cost and time in Microsoft Excel. The percentage cost increase due to change order was about 20.72%. The total percentage cost increment and reduction due to change orders are 30.08% and 9.36% respectively. From this, 28.57 % are below 10% and 10-25% of cost increase from the total project cost. While additional time due to change order was 31.95%. The highest number of change order in item of work had occurred in floor and wall finish, electrical installation, excavation and earth work and sanitary excavation. Whereas as compared to the initial cost of each item of work in all project, glazing work, aluminum work and site work are highly increased due to change order, which was greater than 100%. The most common causes of change order are namely; additional work (18.53%), suggestions to initiate more quality (14.68%), inadequate design (11.38%), design changes (10.09%), significant change in the quantities of work(9.54%), noncompliance of design with owners requirements (7.89%), design errors(7.71%), omission (6.97%), differing site conditions, change of plan or scope by the owner (6.06%), non-availability of materials on the market (2.39%).