Abstract Marketing mix strategies found one of the most important functional strategies that Small and Medium Enterprises (SMEs) adopt to improve performance. The purpose of this study was to examine the effect of marketing mix strategy on the performance of SMEs in the Gurage Zone. Only quantitative research methods and both descriptive and explanatory research designs was employed to address the study objectives and questions. Proportionate stratified and purpusive sampling strategies was used in the study. A structured questionnaire was prepared and given to a sample of 234 owners and/or managers of SMEs in the three selected towns of Gurage Zone to obtain quantitative data (Butajira, Wolikite, and Buee). 209 questionnaires were returned with an 89.3% response rate and was valid for data analysis. Descriptive and inferential analyses was used to examine the quantitative data. According to the results of descriptive statistics, the mean score of marketing strategy variables, i.e. product, price, promotion, and place, and inclined to agreement level. The correlation analysis outcomes have been a positive and significant relationship between marketing mix strategy with performance of the enterprise that is product strategy(r=0.754, p=.000), price strategy (r=0.510, p =.001), promotion strategy (r=0.326, p=.000) and place strategy (r=0.545, p=.000). All independent variables have the significant correlation with the dependent variable „performance". In this case, a product had a higher strong relationship with performance. Similarly, the statistical Result of the multiple regression desplay that all of the predictor variables, Product, price Promotion, and Place, have a positive and significant effect on the Performance of SMEs. The outcomes also exposed that these independent variables was significant combined predictors of performance. The independent variables together described 67.1 percent of the variance in performance. Lastly, recommendations for the SMEs suggested to using relevant promotion strategies to promote their product/service based on the results of the study.