The volumetric change in fine-grained soil with changes in moisture content is one of the most important phenomena. The soil shrinkage characteristic curve describes the magnitude of the variation in bulk volume due to changes in moisture content. In other word, the soil shrinkage characteristic curve defines the constitutive relationship between soil volume and moisture content under drying condition and mostly represented by void ratio versus gravimetric water content. The shape of soil shrinkage characteristic curve, which is mainly composed of two to four stages, is influenced by the type of soil and its structure. These are structural shrinkage and normal shrinkage when the soil is saturated, residual shrinkage when the soil is unsaturated and subjected to volume reduction, zero shrinkage stage when the soil is in dry state and no further reduction in volume of soil occurs. The soil shrinkage characteristic curve is in every case necessary while defining the soil water characteristic curves of unsaturated volume changing soil. It is important in determining soil deformation behavior and understanding the mechanism of soil-water interaction. The determination of soil shrinkage characteristic curve requires the measurement of pore volume and water volume in a known volume of soil simultaneously over the whole range of moisture content from fully saturated state to oven dry state. Despite its importance in unsaturated soil mechanics, there is no research on determining the soil shrinkage characteristic curve in Ethiopia. In this study, soil characterization is done based on expansivity of fine – grained soils found in the study area. Then, the soil shrinkage characteristic curve of volume changing soils in slurry, compacted and undisturbed initial conditions are determined. The effect of initial conditions on soil shrinkage characteristic curves is studied. For soil shrinkage characteristic curve determination, the direct volume measurement method and image-based techniques of soil volume measurement are compared. Both techniques of measuring soil volume showed good agreement, but the image-based technique was found to save time and effort in establishing soil shrinkage characteristic curves. The performance of existing models in predicting the soil shrinkage characteristic curves of soils in undisturbed, compacted and slurry condition for the study area are investigated using MATLAB ® 2016 nonlinear programming solver called fmincon. From the comparison of these existing models, the Leong and Wijaya (2015) model is found to be the best fitting model to soil shrinkage characteristic curve of soils in all three initial conditions. The fitting parameters of Leong and Wijaya (2015) model are correlated to the basic and index soil properties of soil and developed new models for Bahir Dar volume changing soils with the help of JMP ® Pro 14 statistical analysis software. In this study, key soil shrinkage characteristic curve parameters such the air entry value, shrinkage limit, and minimum void ratio have been discussed and their values reported. The water content values corresponding to the air entry values are found to be very close to the corresponding pla stic limit values. Additionally, the values of shrinkage limit obtained from soil shrinkage characteristic curve and from laboratory test are compared. The shrinkage limit values from soil shrinkage characteristic curve in slurry condition is very close to the value of shrinkage limit which is determined by laboratory test. Keywords: Unsaturated Soil, Soil Shrinkage Characteristic Curve, Soil Water Characteristic Curve, Existing Models, Initial Conditions.