The objective of this study was to investigate the impact of Illicit Financial Flow (IIF) on economic growth of Ethiopia. The study used secondary data, particularly from 2000 to 2015 years. It has also employed varies internationally recognized estimation models (Hot Money Narrow and Trade miss-invoicing) to get the magnitude of Illicit Financial Flow in Ethiopia. Moreover, it employed error correction model to get a short and long run velocity and magnitudinal effect of IFF on Gross Domestic Product (GDP). The study found that IFF has significant and negative impact on GDP. Based on research findings, establishing controlling and auditing mechanisms for trans-boundary trade activities in Ethiopia, creating effective institution and building collaborative approach are recommended to curb the magnitude of IFF and its impact on economic growth.