The establishment of Addis Ababa heralded the beginning of a new era in the history of Ethiopian.  Emperor Minilik II, who aspired to create and gradually build a strong and modern Ethiopia, founded his capital on the site occupied by his forebears.

It had been prophesied that Minilik would build his capital at the top of Entoto Mountain about eight kilo meters north of Filwuha – the hot spring down below. He camped there and returned to it after his various national campaigns. Strategic significance of the spot was highly considered in the emperor’s choice of the site which like Ankobar, his former site, was in an imposing position overlooking verdant plains. In additional, the site was on the watershed of the Blue Nile and was, therefore, convenient for easy access to most of the provinces.

Emperor Minilik and Empress Taytu, his consort, meanwhile was being attracted south ward by the hot springs of Filwuha where they often spent many days, accompanied by their court. They chose to make this area of lower elevation their capital in no time. In those days, the temperature at Entoto was exceedingly cold to boot.

In the end, accompanied by their retinue, both came down to Filwuha where a large number of tents were erected. Taytu, admiring the beauty of the scenery around her tent and charmed by the pleasantness of the climate, built a beautiful edifice near the hot springs.

In 1887, Taytu finally left Entoto and settled in her new house above the hot springs and began building the nascent town. All the chefs and servants were offered land around the royal area, and individually, began to build their own dwellings. The army too loved the area. It is said that Taytu was so struck by the beauty of the flora and fauna of the surrounding that she decided to establish her town there, and gave the town the beautiful  name of Addis Ababa, meaning ‘’new flower’’ in Amharic.

Gradually, Addis Ababa gained the approval of Minilik to be a political center and eventually the capital city of the country.

Initially, foreign influence came to Ethiopia through the ancient ports of the red sea following the resounding victory of Ethiopians over Italians aggressors at the battle of Adwa.  Slowly, many foreign nationals began to visit and inhabit Addis Ababa. These new settlers played a pivotal role in the development of Addis Ababa. Armenians, Indians, Greeks, Italians, the French, Arabs and others like them built historical residences, palaces, churches, mosques, monuments, roads and bridges creating a metropolitan atmosphere in Addis Ababa.

Early on, a settlement at Merkato, which is the largest open-market in Africa, was established by Italians, and soon the Ethio-Djibouti railway was constructed by a French company. Armenians and Greeks had especially close ties with the charismatic feel of Addis Ababa.