Background Rabies is a neglected zoonotic disease that affects many developing countries in which it is endemic, including Ethiopia. Regardless of its endemic/epidemic patterns, no study has been conducted on rabies in the study area. Methods A cross-sectional, and retrospective study designs were carried out in selected districts of the West Shewa zone to assess the knowledge, attitude, and practice and estimate the economic impacts of rabies in humans and animals from 2017 to 2021. A total of 422 informants were selected as study participants through simple random sampling techniques from the community. A pre-tested semi-structured questionnaire was used to gather information from the participants. The relevant data was analyzed using SPSS version 20 and then described and interpreted using descriptive statistics and a binary logistic regression test. Results The results indicated that the community had 91.2%, 74.2%, and 81% knowledge, attitude, and practice scores on rabies. Having a dog (AOR=1.7, 95% CI: 1.050, 2.87), acquiring information from mass media (AOR=0.4, 95% CI: 0.175, 0.788; P-value <0.05), and having a history of previous exposure (AOR=7.3, 95% CI: 1.618, 32.69) were significantly associated with knowledge score about rabies. Positive attitudes toward rabies were higher in dog owners (AOR=2.5, 95% CI: 1.074, 5.993) and private workers (AOR=9.5, 95% CI: 1.981, 45.76). Living in an urban area (AOR=0.19, 95% CI: 0.044, 0.881) and Dirre Inchinni district (AOR=0.03, 95% CI: 0.07, 0.150) had good practices level of rabies. In addition, 579 suspected human rabies cases and 183 animal cases were registered during the study periods. The number of rabies cases that occurred in humans, was higher than in animals in the study area, with varying degrees of incidence. Rabies in the study area resulted in direct and indirect costs of around 142590 USD. Conclusions The study showed that most of the respondents were unaware of rabies. Therefore, effective and well-organized control measures like annual vaccination and awareness campaigns should be developed, focusing on identified risk factors and areas. The incidence of the diseases should be considered while designing control and prevention measures.