The main objective of this study is to investigate the impact of expanding SME sector on the economic growth using time series data from Egypt for the period (1980-2010). This study aims to fill the gap in the literature by providing the first empirical study with time series data to investigate the relationship between SMEs expansion and the economic growth for the Egyptian economy .The study proves a positive relationship between SMEs expansion and economic growth, suggesting that the Egyptian government should focus in boosting that sector