This study is assessing the performance of the agricultural extension system and identifying factors explaining it. The paper used both quantitative and qualitative data collection methods. Quantitative data gathered based on a questionnaire survey of 143 development agents (DAs) in Minjar Shenkora and Ada’a districts. Qualitative data were collected from 25 key informants and eight separate focus group discussants. Quantitative data was analyzed by both descriptive statistics and econometric model while qualitative data were analyzed through categorization, narration and interpretation. Results show that, despite huge government investments and having one of the highest DA-to farmers’ ratio, Ethiopia has not been able to achieve the desired goals of agricultural advancement. This is mainly because of weak and limited interactions, synergies and partnership among actors, lack of adequate facilities of FTCs, lack of physical resources for mobility, DAs lack of work motivation, lack of strong supervision, lack of technical competence of DAs, and lack of involvement of DAs in the decision making process. The Econometric model results reveal that systems of rewards and sanctions, enforcement of performance targets, interaction and partnership among relevant actors, supervision, donor funding, number of motorbikes, and DAs capacity building trainings are most significantly influenced the performance of agricultural extension service. This research showed that number of DAs is not a sufficient condition of enhancing extension performance, but an effective extension system needs to focus on the enabling environment for DAs to be motivated to work as mandated.