The dairy sector is threatened by mastitis, the most prominent and complicated infectious illness in the world for dairy cows. The aim of this study was to determine the prevalence of mastitis and potential predisposing factors. A cross-sectional study was carried out from November 2016 to April 2017 in and around Holeta town. A total of 316 lactating cows were purposefully selected and diagnosed for mastitis by physical examination and using the California mastitis test. The total prevalence of mastitis at the cow level was 74.05% (95% CI = 0.69-0.79). At the cow level, the prevalence of clinical and subclinical mastitis was 18.35% and 55.7%, respectively, whilst at the quarter level, it was 9.26% and 35%. Of the 1264 quarters inspected, 47 (3.72%), which correspond to 39 (12.34%), were discovered to be blind teats, while the other 1217 (96.28%) were found to be in use. The intrinsic factors significantly related (p 0.05) with the presence of mastitis in the multivariable logistic regression model were breed (AOR = 0.003, CI = 0.0003-0.335, in local cows (AOR = 0.003, CI = 0.0003-0.335, p = 0.000), age, in adult cows (AOR = 16, CI = 3.072-83.293, p = 0.001) and in old cows (AOR = 20, CI = 1.031-388.39, p = 0.048) and stage of lactation, in mid-lactation stage (AOR = 0.08, CI = 0.028-0.211, p = 0.000) and in late lactation (AOR = 0.1, CI = 0.033-0.288, p = 0.000). Semintensive management system (AOR = 16.85, CI = 5.484-51.824, p = 0.000) and extensive management system (AOR = 0.14, CI = 0.059-0.320, p = 0.000), milking hygiene (AOR = 9.43, CI = 3.443-25.805, p = 0.000), and previous mastitis exposure (AOR = 2.7, CI = 1.036-7.022, p = 0.042). This study revealed that subclinical mastitis had a high prevalence rate relative to clinical mastitis. This reveals that the disease lacks strategic preventative and control measures and that mastitis is economically significant in the studied area. According to this study, in order to reduce the economic loss of dairy farms, there should be stringent hygienic milking practices and a consistently sanitary conditions of the farms. Additionally, it would be helpful to promote awareness about routinely checking for subclinical mastitis and culling old and very often infected cows.