The objective of this study was to examine the effect of knowledge management practices on organizational performance in the case of commercial bank of Ethiopia, Bahir Dar city. The study was directed by four specific research objectives which pursued answers for the effect of knowledge management practices on organizational performance. The specific objectives of the study were to examine the effect of knowledge management practices that included knowledge acquisition, knowledge creation, knowledge conversion, knowledge sharing and knowledge storing on organizational performance of commercial bank of Ethiopia, Bahir Dar city. The study employed an explanatory research design due to its intent to find the effect of knowledge management practices on organizational performance in the case of commercial bank of Ethiopia, Bahir Dar city. The total population of the study was 563 employees. Stratified random sampling was used to sample 220 respondents who represented the total population of the study area with a 95% confidence level and 5% margin of error. A quantitative approach was used and data were collected through questionnaires and analyzed using SPSS after coding and cleaning to eliminate any inadequacies. Data were analyzed using frequency descriptions, correlation, and regression analysis. Most importantly, a multiple regression model was applied to determine the cause and effect relationship between the dependent and independent variables. The findings revealed that with the exception of knowledge acquisition, all independent variables (i.e., Knowledge creation, Knowledge conversion, Knowledge sharing and Knowledge storing) have a significant positive influence on organization performance of commercial bank of Ethiopia in Bahir Dar City Branches. The findings are discussed in detail in the research along with some recommendations for organizations and researchers.