The purpose of this study was to conduct an assessment of the factors that affect Foreign Direct Investments (FDI) in Kenya. The objectives of this study were to determine the existing barriers to making foreign direct investment in Kenya, to assess the existing potential risks to making foreign direct investment in Kenya and to assess the extent to which Kenyan labor force affects the foreign investment decisions of multinationals in Kenya. The design of the study was descriptive in nature. The research used both qualitative and quantitative data. The study focused on the population of 812 the multinational companies with offices in Nairobi, selected key informants from the Ministry of Foreign Affairs and Trade in Kenya and also key informants from the Development Partners. The study?s sample was 72 respondents from Multinational companies with offices in Nairobi, selected key informants from the Ministry of Foreign Affairs and Trade in Kenya and also key informants from the Development Partners. Structured questionnaires were used to gather information from key informants. The SPSS software was used to analyze the collected data to produce frequency distribution tables, mean and regression analysis of the dependent and independent variables. Regarding the barriers to making FDI in Kenya, the study revealed that generally Kenya did not have a good political environment for making FDI. The study also revealed that the fear of wrangling amongst political parties in Kenya, the frequent fluctuations in interest and currency and unfavorable cost of doing business in Kenya affected the FDI decisions of Multinational Companies. The study revealed that the potential risks to making foreign investments in Kenya were the existing level of corruption in Kenya, the current market restrictions and existing non-attractive investment policies. The study also revealed that on average multinationals would employ a Kenyan to a Chief Executive position in their organizations, mainly because the available labor force in Kenya had the commensurate skills requirements to work for a Multinational Company. However the study indicated that the current level of labor costs of the Kenyan labor force was a major concern for a potential Multinational seeking to make an FDI decision in Kenya. In conclusion, the benefits of FDI would only ensue to countries, sectors and local communities, if national policies facilitated the development of attractive investment frameworks and if country specific risks would be a threat to multinational companies as they created instabilities that would make the costs of doing businesses unpredictable were addressed. To ensure consistent FDI inflows it would be important for government institutions that were responsible for making and implementing policies that affected a country?s investment climate to work towards improving environmental factors that influenced FDI. Finally given that the quality of labor and their related costs were an important factor in deciding location of FDI especially for some labor-intensive manufacturing industries, FDI recipient countries would therefore develop internal strategies to ensure that their labor market resources are equipped with the relevant skills, education and productivity levels and that would be attractive for a potential FDI partner. The study recommended that the Government of Kenya, through the relevant national bodies re-evaluated the existing framework and strategies for attracting FDI by ensuring that the identified barriers, uncertainties to making FDI were addressed. Further it was also imperative that the Kenyan Government developed a framework for ensuring that its citizens remained competitive and potentially attractive to Multinational Companies.