The study examines the local integration of Somali and Eritrean refugees in Addis Ababa. It is a comparative study of the host-refugees integration taking the case study of Eritreans and Somali refugees. In this study, Gofa Mebrat Hail for Eritrean refugees and Bole Michael for Somali refugees in Addis Ababa were selected based on their numerical upper hand as well as the prolonged settlement of the refugees in the respective areas. Qualitative research methodology was employed and semi-structured interviews with refugees and host communities, and key informant interviews with ARRA and local authorities were conducted. In addition, FGDs with refugees and host communities of the study areas were held. The respondents for both interviews and FGDs were selected purposively. The historical and ongoing relations between Ethiopia and the refugee producing countries, as structural factor, impacted not only the country’s policy direction towards the refugees’ but also the refugees’ and the hosts’ perception towards local integration. The study revealed that Somali refugees are more integrated with the host communities than Eritrean refugee in the respective areas despite the cultural compatibility of the latter because of the interplay of structural, refugee and host community related factors. The prolonged settlement and engagement of Somali refugees in both formal and informal economy in the area resulted in the refugees’ progressive integration with the host communities by dwindling prior mutual mistrust and misperceptions. However, the securitization of Somali refugees in the area by interlinking them with the insecurity and terrorism in their country has been obstructing the intensive integration by creating fear among the refugees and the host communities. On the other hand, the Eritrean refugees perceive the especial treatment provided for them as politically motivated and temporary. Consideration of Ethiopia as country of transit and the subsequent lack of motive on the side of host communities caused low level of the refugees’ integration with locals.