This study aimed at exploring the extent of foreign exchange earnings, the level of economic development, and the relationship between these two variables in Kampala District, Uganda. Using multiple linear regression analysis, the study investigated how foreign exchange earnings contribute to economic development in the district. The results indicated a statistically significant positive relationship between foreign exchange earnings and the economic development index. Specifically, the coefficient for foreign exchange earnings was 0.3745 (p-value = 0.000), suggesting that for every unit increase in foreign exchange earnings, the economic development index increased by approximately 0.37 units. The constant term was also statistically significant, with a coefficient of 6.3309 (p-value = 0.000), indicating that other baseline factors contribute to economic development even in the absence of foreign exchange earnings. The study further incorporated variables such as infrastructure quality and investment levels, but these did not show a statistically significant impact on economic development. Infrastructure quality had a coefficient of 0.1860 (p-value = 0.350), and investment levels had a coefficient of 0.0346 (p-value = 0.173), suggesting that while these factors are essential, their direct influence on economic development in Kampala was not as strong as that of foreign exchange earnings. The robustness of the results was confirmed by high t-values, especially for the foreign exchange earnings variable (t = 21.991). The findings support the conclusion that foreign exchange earnings are a critical driver of economic development in Kampala District, Uganda, highlighting the need for policies that support and diversify foreign exchange-generating activities, such as exports, remittances, and tourism. Recommendations were made to enhance foreign exchange sources, improve infrastructure, encourage private sector investment, and foster regional integration to sustain and further accelerate economic development in the district.