Dire Dawa lies in the eastern part of Ethiopia. Founded in 1902 after the Addis Ababa - Djibouti Railway reached the area. The railroad could not reach the city of Harar at its higher elevation, so Dire Dawa was built nearby. This led it becoming an important center of trade between the port of Djibouti and the capital city, Addis Ababa.
The Ethiopian revolution affected the city in many ways. Starting March 1974, there was some worker unrest; Europeans, Yemeni Arabs, and Indians left Dire Dawa; the Greek and Armenian churches were eventually closed due to dwindling membership. Many cement & textile factoris were nationalised and the local branch of the teachers’ union was sacked for alleged anti-revolutoinary activites.
Dire Dawa was occupied by the EPRDF, May 1991. There were reports of about 100 people killed resisting the EPRDF. In 1991, when the Somali National Movement took control of northern Somalia, they dismantled and sold the only publicly owned industry in the whole Somali northern region, a cement factory near Berbera, which was shipped off to help expand the cement factory in Dire Dawa. Both the Issa and Gurgura Liberation Front and the Oromo Liberation Front claimed the city. As a result, there were numerous clashes between the two groups from 1991 until 1993. This ongoing violence and the fear of protracted ethnic conflict caused the city to be designated federally administered
Dire Dawa was separated from the Oromia Region around 1998 to become a chartered city.