Birth trauma is described as organ or tissue damage caused by physical pressure during birth. Birth trauma ranges from minor problems that go away on their own to significant wounds that might result in infant morbidity and mortality over the long term. It is one of the critical issues that have received the least attention globally. In Ethiopia, evidence regarding the pooled prevalence of birth trauma among neonates is scarce. Therefore, this study estimated the pooled prevalence of birth trauma and associated factors in Ethiopia over the last decade. The Preferred Items for Systematic Reviews and Meta-analysis (PRISMA-2009) guidelines were followed. The PubMed, Scopus, Web of Science, Google Scholar and Google databases were searched. Articles published in the English language in the last decade were included. Data were extracted by a pre-prepared Excel sheet, and analysis was conducted using STATA version 14. Subgroup analysis was also undertaken to evaluate how the prevalence of birth trauma differs across regions of Ethiopia. The pooled prevalence of birth trauma in Ethiopia was 10.57% (95% CI: 3.08, 18.07), with a heterogeneity index (I2) of 92.6% (p < 0.001). Presentation other than vertex AOR 11.94 (95% CI: 6.25–17.62), P = 0.001 and I2 = 53%, labor assisted by forceps AOR 6.25 (95% CI: 2.95–10.10), P = 0.002 with I2 = 51.8% and labor assisted with vacuum AOR 17.47 (95% CI: 4.25–39.46), P = 0.0001 with I2 = 92.9% were factors associated with the pooled prevalence of birth trauma in Ethiopia. The pooled prevalence of birth trauma in Ethiopia is considerable. Non-vertex presentation, use of instrumental delivery and prolonged labor were factors significantly associated with birth trauma. Strengthening neonatal improvement activities (thermal protection, hygienic umbilical cord and skin care, early and exclusive breastfeeding, assessment for signs of serious health problems or need for additional care and preventive treatment), is need.