This study examines the impact of foreign banks' entry on Egyptian local banks covering the period from 2011 to 2021 and its impact on banks' performance and profitability. It aims to determine how the entry of foreign banks triggers domestic banks to become more competitive and improve their efficiency. The study depends on the Central Bank of Egypt's (CBE) reports to obtain bank data and employs the World Bank database to examine macroeconomic variables. A multiple regression model is used to investigate the impact of foreign banks' entry on local banks. The study confirms the negative impact of foreign banks' entry on the local bank's performance during the sample period. However, foreign banks improve the functioning of the banking industry in general and domestic banks specifically.