Background Shiga toxin producing Escherichia coli O157:H7 (STEC) is considered the most prevalent food borne pathogen that has gained increasing attention worldwide in recent years. Methods A cross-sectional study was carried out at Bedele Municipal abattoir on cattle that were reported healthy from detailed ante-mortem inspections and having various body conditions scores. A total of 516 samples were collected and examined after enriched in modified peptone water. Following an enrichment, the samples were plated onto MacConkey agar and then onto Eosin methylene blue agar. Finally after a few similar procedures, 14 E. coli O157:H7 (STEC) isolates were confirmed through latex agglutination test. The collected data were analyzed using SPSS version 20 statistical software. Results This study finding revealed that the overall prevalence of E. coli O157:H7 out of 516 samples was found to be 2.7%. However, on sample type basis, the prevalence of E. coli O157:H7 from feacal samples, carcass swabs, butcher hand swabs and knife swabs were 4.7%, 3.3%, 1.1% and 1.1%, respectively. It was also found that that the prevalence of E. coli O157:H7 was significantly affected by age groups of slaughtered cattle (p<0.05). Moreover, in vitro antimicrobial susceptibility test result on average showed that almost all of E. coli O157:H7 isolates were highly susceptible to kanamycin and no resistance was shown to ciprofloxacin and gentamicin. Finally, the conventional PCR detection of stx1, st2 and hylA genes revealed that only 21.4% and 14.3% were found to contain stx1 and hylA genes respectively. Conclusion To wrap up, this study showed that Shiga toxin producing E. coli O157:H7 (STEC) isolates were found with almost low overall prevalence rate from all sample sources in this study site. Therefore, improving abattoir facilities and slaughter house workers’ personal hygiene are recommended to curtail E. coli O157:H7 meat contamination in this abattoir.