Rabies, one of the oldest and deadliest diseases known to human, is incurable and neglected viral zoonosis which has been threatening the human life for many years despite being entirely preventable. Community awareness play significant role in preventing this fatal disease. Therefore, this cross sectional study was conducted from November to December 2016 with the objective to assess the community knowledge, attitudes, and practices (KAP) regarding rabies in Munesa district, Arsi zone, south eastern Ethiopia. A multistage sampling technique was employed for selection of sample unit and data were collected from 150 household by face-to-face interview using a semi structured pretested questionnaire. Logistic regression was used for assessing the association of independent variable with KAP score. Out of 150 participants interviewed 59.3% of them were males and 40.7% were females. The respondents from urban, peri-urban and rural residence comprise about 32.7%, 30% and 37.3% of total participants, respectively. Almost all (99.3%) participants had heard about rabies and 88.7% of them knew its zoonotic significance which is a good Knowledge. However, knowledge gap was observed regarding the cause, transmission, incubation period and prevention methods. The overall KAP result revealed that 57.3% and 42.3% of participants had a good and poor KAP score, respectively. Multivariable logistic regression analysis indicated that good KAP score was significantly higher in male than female (OR= 3.14, CI=1.01 -9.79, P = 0.048), in those who experienced dog bite than those who were not bitten by dog (OR=7.37, CI=1.83-29.61, P=0.005), in dog owners than non-dog owners (OR=7.53, CI=2.01-28.19, p=0.003) and in trained participants than untrained (OR= 18.62, CI=1.56-222.47, p= 0.021). Furthermore, education level (p=0.021) and residence (p=0.031) participants were also significantly associated with a higher good KAP score. This study showed that community in munesa district has good general information about rabies. However, there is a need for further awareness creation which requires the collaborative effort of government authority, medical and veterinary professionals.