This dissertation investigated the effect of employees' dynamic capability on their performance within the Ethiopian brewery factories , with entrepreneurial orientation acting as a potential mediating factor. The research adopted a positivist paradigm, employing a quantitative and discriptive-explanatory approach. Data collection involved a standardized, self-administered questionnaire distributed to 381 selected brewery employees through simple random sampling. Statistical methods were utilized via SmartPLS, SEM, and SPSS version 27 to test hypotheses regarding the relationships between the study variables. The findings revealed a positive and significant relationship between employees' dynamic capability and performance. This held even when dynamic capability scores were relatively low, suggesting a consistently positive influence. Additionally, a positive and significant relationship was found between employee dynamic capability (independent variable) and entrepreneurial orientation (mediating variable). Furthermore, entrepreneurial orientation demonstrated a positive and significant relationship with employee performance. While the direct effect analysis indicated a positive relationship between employees’ dynamic capability and performance, the inclusion of entrepreneurial orientation as a mediator strengthened this association. The data analysis and presentation revealed that considering entrepreneurial orientation as a mediator increased the explained variance in employee performance, confirming partial mediation. Based on these findings, the dissertation offers practical recommendations for Brewery factories of Addis Ababa, managers, employees, and future researchers. Recommendations for Factories include fostering a culture that encourages employee learning and innovation to enhance dynamic capabilities. Managers are advised to develop programs that promote proactive problem-solving and opportunity identification among employees. Employees are encouraged to embrace continuous learning and actively seek opportunities to contribute their ideas.