<p>This study examines the relationship between the entrepreneurial environment and enterprise performance, with entrepreneurial competency serving as a mediating factor. Specifically, it examines the role of access to finance, marketing, government support, and entrepreneurial policy in shaping the performance of enterprises. A mixed-methods approach was employed, combining key informant interviews and a structured questionnaire administered to a stratified random sample of 342 enterprises in Woldia Town. Data were analyzed using Structural Equation Modeling (SEM) with AMOS. The results indicate that all proposed hypotheses are supported, with significant associations observed between entrepreneurial policy, government support, market access, access to finance, and enterprise performance. Moreover, entrepreneurial competency shows a significant positive relationship with enterprise performance. The mediating role of entrepreneurial competency was further explored using the bootstrapping method, which revealed substantial mediation effects. At the same time, the entrepreneurial environment had a direct influence on enterprise performance. These findings underscore the critical role of supportive entrepreneurial ecosystems in enhancing enterprise performance through improved competencies. Accordingly, policymakers are encouraged to reduce bureaucratic barriers, expand access to finance, and foster collaborative platforms that connect entrepreneurs with resources, networks, and opportunities.</p>