This study aimed to analyze the matrix of ethnic federalism in protecting internal minority rights in Ethiopia via Goba and Robe towns as a case study at Oromia regional state. The post-1990s political formula of Ethiopia was designed considering all ethnolinguistic groups as inhabitants of their own defined territory. It seems that in the architecture of the constitution, there will be ethnic homogeneous states. But, the reality in the ground has shown that none of the units is purely homogenous due to economic migration, (re)settlement, villagization programs, and freedom of movement granted in the constitution. A mixed approach with a cross-sectional survey was used. Questionnaires, interviewees, focused group discussion, and document analyses were used as a primary data. Snowball and purposive sampling were used to select survey respondents. In both town administrations, a kin situation exists; there are constitutional and other legal frameworks gaps, inducing mistrust and tension between minorities and dominant groups, systematic segregation, denying fair and effective representation at levels of government. Therefore, adequately recognizing and legalizing the rights of internal minorities should be the prime duty of the region, establishing particular institutions mandated to protect internal minorities, and government should work on fostering people-to-people integration to reverse the looming mistrust.