Construction is a team activity involving many different actors specialized in various areas. An ineffective communication management system in the construction projects is the major cause of failure. The main objective of the study is to explore the communication practices and its impact on the public building construction projects between stakeholders in Bahir Dar City. The significance of the study is to help all stakeholders to be aware of factors, which are drawbacks of project success to avoid such negative impacts and get committed for better performance. Data were collected from building contractors, consultants, clients, and Urban Development and Housing Construction Bureau. The data collection method included a desk study interview, panel discussion, and questionnaire survey. The gathered data were analyzed by using Statistical Package for Social Scientist (SPSS) software computer program. Both descriptive and inferential statistics were used for the analysis of the data. Per the analysis carried out, communication practice in construction companies is less effective; less training is given for the purpose of project communication. As understood from the finding, oral communication is the most widely used or practiced in construction projects rather than formal and written communications. The majority of construction firms use informal communication methods in their construction projects. The most popular communication channel (96%) used in construction projects were phones. The study revealed that the top five impacts of communication in building construction projects due to ineffective information exchange are delay (87%), time overrun of project (85%), cost overrun (81%), variation order (70%), termination of projects and health and safety issues (70%).