The site of Addis Ababa was chosen by Empress Taytu Betul and the city was founded in 1886 by her husband, Emperor Menelik II. The name of the city (ኣዲስ ኣበባ) was taken from parts of the city called hora Finfinnee ("hot springs") in Oromo. Another Oromo name of the city is Sheger . Menelik, as initially a King of the Shewa province, had found Mount Entoto a useful base for military operations in the south of his realm, and in 1879 visited the reputed ruins of a medieval town, and an unfinished rock church that showed proof of an Ethiopian presence in the area prior to the campaigns of Ahmad Gragn. His interest in the area grew when his wife Taytu began work on a church on Entoto, and Menelik endowed a second church in the area.
However the immediate area did not encourage the founding of a town due to the lack of firewood and water, so settlement actually began in the valley south of the mountain in 1886. Initially, Taytu built a house for herself near the "Filwoha" hot mineral springs, where she and members of the Showan Royal Court liked to take mineral baths. Other nobility and their staffs and households settled the vicinity, and Menelik expanded his wife's house to become the Imperial Palace which remains the seat of government in Addis Ababa today. The name changed to Addis Ababa and became Ethiopia's capital when Menelik II became Emperor of Ethiopia. The town grew by leaps and bounds. One of Emperor Menelik's contributions that is still visible today is the planting of numerous eucalyptus trees along the city streets.
On 5 May 1936, Italian troops invaded Addis Ababa during the Second Italo-Abyssinian War, making it the capital of Italian East Africa from 1936 to 1941 after killing about a million Ethiopians with mustard gas. After the Italian army in Ethiopia was defeated by the British forces during the East African Campaign, Emperor Haile Selassie returned to Addis Ababa on 5 May 1941—five years to the very day after he had departed—and immediately began the work of re-establishing his capital.
Emperor Haile Selassie helped form the Organization of African Unity in 1963, and invited the new organization to keep its headquarters in the city. The OAU was dissolved in 2002 and replaced by the African Union (AU), also headquartered in Addis Ababa. The United Nations Economic Commission for Africa also has its headquarters in Addis Ababa. Addis Ababa was also the site of the Council of the Oriental Orthodox Churches in 1965.
Ethiopia has often been called the original home of mankind due to various humanoid fossil discoveries like the Australopithecine Lucy. North eastern Africa, and the Afar region in particular was the central focus of these claims until recent DNA evidence suggested origins in south central Ethiopian regions like present-day Addis Ababa. After analysing the DNA of almost 1,000 people around the world, geneticists and other scientists claimed people spread from what is now Addis Ababa 100,000 years ago. The research indicated that genetic diversity declines steadily the farther one's ancestors traveled from Addis Ababa, Ethiopia.
Addis Ababa lies at an altitude of 7,546 feet (2,300 metres) and is a grassland biome, located at 9°1′48″N 38°44′24″E / 9.03°N 38.74°E / 9.03; 38.74Coordinates: 9°1′48″N 38°44′24″E / 9.03°N 38.74°E / 9.03; 38.74. The city lies at the foot of Mount Entoto. From its lowest point, around Bole International Airport, at 2,326 metres above sea level in the southern periphery, the city rises to over 3,000 metres (9,800 ft) in the Entoto Mountains to the north.
The economic activities in Addis Ababa are diverse. According to official statistics from the federal government, some 119,197 people in the city are engaged in trade and commerce; 113,977 in manufacturing and industry; 80,391 homemakers of different variety; 71,186 in civil administration; 50,538 in transport and communication; 42,514 in education, health and social services; 32,685 in hotel and catering services; and 16,602 in agriculture. In addition to the residents of rural parts of Addis Ababa, the city dwellers also participate in animal husbandry and cultivation of gardens. 677 hectares (1,670 acres) of land is irrigated annually, on which 129,880 quintals of vegetables are cultivated. It is a relatively clean and safe city, with the most common crimes being pickpocketing, scams and minor burglary. The city has recently been in a construction boom with tall buildings rising in many places. Various luxury services have also become available and the construction of shopping malls has recently increased. According to Tia Goldenberg of IOL, area spa professionals said that some people have labelled the city, "the spa capital of Africa."
Ethiopian Airlines has its headquarters on the grounds of Bole International Airport in Addis Ababa.
Addis Ababa University was founded in 1950 and was originally named "University College of Addis Ababa", then renamed in 1962 for the former Ethiopian emperor Haile Selassie I who had donated his Genete Leul Palace to be the University main campus in the previous year. It received its current name in 1975. Although the university has six of its seven campi within Addis Ababa (the seventh is located in Debre Zeit, about 45 km/28 mi away), it also maintains branches in many cities throughout Ethiopia. It is the home of the Institute of Ethiopian Studies and the Ethnological Museum. The city also has numerous private colleges including Admas College, Ethiopian Civil Service College and Unity University.
Public transportation is through public buses from Anbessa City Bus Service Enterprise or blue and white share taxis. The taxis are usually minibuses that can seat at most twelve people. Two people are responsible for each taxi, the driver and a weyala who collects fares and calls out the taxi's destination.
The construction of the Addis Ababa Ring Road was initiated in 1998 to implement the city master plan and enhance peripheral development. The Ring Road was divided into three major phases that connect all the five main gates in and out of Addis Ababa with all other Regions (Jimma, Debre Zeit, Asmara, Gojjam and Ambo). For this project, China Road and Bridge Corporation (CRBC) was the partner of Addis Ababa City Roads Authority (AACRA). The Ring Road has greatly helped to decongest and alleviate city car traffic.
The city is served by Bole International Airport, where a new terminal opened in 2003. The old Lideta Airport in the western "Old Airport" district is used mostly by small craft and military planes and helicopters. Addis Ababa also has had a railway connection with Djibouti City, with a picturesque French style railway station, but the railway no longer operates.
A light rail system is planned; in September 2010, Ethiopian Railway Corp reached a funding agreement with Export and Import Bank of China. Plans include a 30km network with two lines; an east-west line from Ayat to the Torhailoch ringroad, and from Menelik Square to Merkato Bus Station, Meskel Square and Akaki.