Background Genetic diversity in Plasmodium falciparum poses a major threat to malaria control and elimination interventions. Characterization of the genetic diversity of P. falciparum strains can be used to assess intensity of parasite transmission and identify potential deficiencies in malaria control programmes, which provides vital information to evaluating malaria elimination efforts. This study investigated the P. falciparum genetic diversity and genotype multiplicity of infection in parasite isolates from cases with uncomplicated P. falciparum malaria in Southwest Ethiopia.Methods A total of 80 P. falciparum microscopy and qPCR positive blood samples were collected from study participants aged six months to sixty years, who visited the health facilities during study evaluating the efficacy of artemether-lumefantrine from September-December, 2017. Polymorphic regions of the msp-1 and msp-2 were genotyped by nested polymerase chain reactions (nPCR) followed by gel electrophoresis for fragment analysis.Results Of 80 qPCR-positive samples analysed for polymorphisms on msp-1 and msp-2 genes, the efficiency of msp-1 and msp-2 gene amplification reactions with family-specific primers were 95 % and 98.8%, respectively. Allelic variation of 90% (72/80) for msp-1 and 86.2% (69/80) for msp-2 were observed. K1 was the predominant msp-1 allelic family detected in 20.8% (15/72) of the samples followed by MAD20 and RO33. Within msp-2, allelic family FC27 showed a higher frequency (26.1%) compared to IC/3D7 (15.9%). Ten different alleles were observed in msp-1 with 6 alleles for K1, 3 alleles for MAD20 and 1 allele for RO33. In msp-2, 19 individual alleles were detected with 10 alleles for FC27 and 9 alleles for 3D7. Eighty percent (80%) of isolates had multiple genotypes and the overall mean multiplicity of infection was 3.2 (95% CI: 2.87- 3.46). The heterozygosity indices were 0.43 and 0.85 for msp-1 and msp-2, respectively. There was no significant association between multiplicity of infection and age or parasite density.Conclusions The study revealed high levels of genetic diversity and mixed-strain infections of P. falciparum populations in Chewaka district, Ethiopia, suggesting that both endemicity level and malaria transmission remain high and that strengthened control efforts are needed in Ethiopia.