Background Childhood stunting is the most widely prevalent among under-five children in Ethiopia. Despite the individual-level factors of childhood stunting are well documented, community-level factors have not been given much attention in the country. This study aimed to identify individual- and community-level factors associated with stunting among under-five children in Ethiopia. Methods Cross-sectional data from the 2016 Ethiopian Demographic and Health Survey was used. A total of 8855 under-five children and 640 community clusters were included in the current analysis. A multilevel logistic regression model was used at 5% level of significance to determine the individual- and community-level factors associated with childhood stunting. Results The prevalence of stunting was found to be 38.39% in Ethiopian under-five children. The study showed that the percentage change in variance of the full model accounted for about 53.6% in odds of childhood stunting across the communities. At individual-level, ages of the child above 12 months, male gender, small size of the child at birth, children from poor households, low maternal education, and being multiple birth had significantly increased the odds of childhood stunting. At community-level, children from communities of Amhara, Tigray, and Benishangul more suffer from childhood stunting as compared to Addis Ababa’s community children. Similarly, children from Muslim, Orthodox and other traditional religion followers had higher log odds of stunting relative to children of the protestant community. Conclusions This study showed individual- and community-level factors determined childhood stunting in Ethiopian children. Promotion of girl education, improving the economic status of households, improving maternal nutrition, improving age-specific child feeding practices, nutritional care of low birth weight babies, promotion of context-specific child feeding practices and narrowing rural-urban disparities are recommended.