Liquidity reflects the capability of the commercial banks to fund asset growth and meet its obligations as they mature without incurring losses. The main aim of this study is to examine determinants of liquidity in case of Ethiopian commercial banks. Eleven commercial banks in Ethiopia were taken as a sample. The researcher used purposive sampling technique to select those eleven commercial banks of Ethiopia. The data covers the period from 2011/122020/21G.C were collected from audited annual report of each commercial banks and annual report of national bank of Ethiopia for analysis. Since the data is continuous in nature, a quantitative approach was used and random effects technique was used for regression analysis, so in order to determine the effect of listed variables on liquidity of commercial banks in Ethiopian positivism knowledge claim is employed. This study analyzed the effect of independent variables mainly classified as internal and external factors are namely capital adequacy, profitability, bank size, loan growth, interest rate margin, deposit mobilized, NBE bill purchase requirement, inflation, GDP growth and Money supply; on the dependent variable, which is liquidity of commercial banks.. Among those variables capital adequacy, loan growth, deposit mobilization, money supply and GDP growth found to have statistically significant effect. From these statistically significant variables, capital adequacy and deposit mobilization have positive effect over liquidity of commercial banks. Finally the researcher recommends Ethiopian commercial banks to boost their liquidity through contractionary monetary policy, maintaining adequate capital and aggressive deposit mobilization campaign.