Escalation in the construction market in recent years has been extremely volatile; particularly in Ethiopia's economy, price escalation is a sensitive issue causing termination of public construction projects. This situation has created a great deal of uncertainty and nervousness among the construction field. The financial success of a construction projects can be uncertain and at risk due to changes in Escalation rates during construction and studies also showed that nine out of every ten construction projects experienced price escalation and occurred even before construction begins. The general objective of this study was to investigate price escalation and adjustment practices on Debre Markos city public building construction projects and this study encompassed Clients, Contractors, Consultants and regulatory bodies who work in Debre Markos city public building construction projects. The data were collected using both primary data and secondary data through Identifying variables from literature reviews, questionnaires, interviews, case studies and data from reports. For data analysis and developing model Descriptive statistics and multiple linear regression were employed to study on factors of price escalation, critical impacts and its adjustment practices using Statistical Package for Social Science software to analyze data. Conceptual framework also conducted to show relationship between price escalation and group factors of price escalation with possible mitigation measures. The research findings showed that Increase in Construction Material Cost, inflation and money exchange rates were among the major factors of price escalation. And factors grouped as Contract related Factors, Government related Factors, Material related Factors, Planning related Factors, and management related factors affect price escalation with 0.451, 0.48, 0.523, 0.42 and 0.539 rates respectively. Delays, higher Project Costs, Project budget shortage were among the critical impacts in which Debre Markos city public Building projects were faced when price escalation issues happened. The most popular practice of price adjustment remained in use in Debre markos Building projects were interpreted by using a formula stated in the escalation clause agreed in the contract document. Finally recommendations were proposed that enables to mitigate problems of price escalation. Key words: Debre Markos city, Price adjustment, Price escalation, public building projects.