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Internal control in the SME business process is very important so that errors and irregularities that occur immediately can be overcome so that objectives can still be achieved. The control function is one of the management functions that cannot be returned from other management functions (planning, organizing, and directing). However, many studies still doubt the role of internal control on competitive advantage and the performance of SMEs. This study aims to examine the role of internal control on competitive advantage and SME performance. This research was conducted by survey method by distributing questionnaires to the respondens that are SMEs in district of Magelang. The sample size of the studi are 104 respondents. Data analysis was performed using SPSS 21. The results have shown that internal control has a positive effect on competitive advantage and SME performance. The results of this study indicated that internal control plays a role in competitive advantage and SME performance.