Healthiness of financial system of a country depends on the success and competitiveness of financial institutions. The success and competitiveness of financial institutions are primarily realized through banks service quality, customer satisfaction and customer loyalty. Cognizant to these facts, this research was conducted to evaluate service quality, customer satisfaction and customer loyalty of commercial banks in Ethiopia. Two hundred three customers were surveyed with purposive sampling from selected commercial banks in major cities in the country. Further, the study explored the relationship among service quality, customer satisfaction and customer loyalty in Ethiopian Banking industry. The study revealed that customers are not satisfied with all dimensions of service quality of commercial banks in Ethiopia, and customers are not loyal to the banks. The study, further, confirmed that service quality, customer satisfaction and loyalty were found to be significantly correlated. Moreover, the study disclosed the existence of significant difference between private banks and public banks for the variables mentioned. The study recommends that banks in general and commercial bank of Ethiopia in particular have to improve the tangibility, reliability, responsiveness, assurance and empathy dimension of service quality in order to satisfy customers and hence to make customers loyal to banks.