Objective The pandemic is expanding exponentially, burning, and threatening the world population regardless of differences. Cognizant of these, world nations make it their daily agenda and give due concern in preventing and intervening it. However, the prevention and intervention strategies are of more biological and less attention is given for the psychological impacts. So that this manuscript is intended to review the psychological impacts and mitigating strategies of COVID-19 in Ethiopia. Method Out the 63 downloaded articles, 26 articles were selected by considering relatedness, reputable journal, and pattern of writing and reviewed. Results Most reviewed studies reported negative psychological impacts including, boredom, loneliness, anger, violence and abuse, distress, low mood and irritability, anxiety, insomnia, hopelessness and worthless, and suicide. Other associated factors like poverty, fears of infection, duration of quarantine, lack of genuine and adequate information, lack of basic supplies, stigma, housing condition, and cultural issues potentially worsen the psychological impacts. Conclusion Psychological intervention strategies like mobilizing volunteers and professionals, identifying vulnerable population, assuring psychological readiness, offering adequate and genuine information, providing adequate supplies, improving communication for those in quarantine, utilizing counseling platform and rehabilitation program are of the cures for psychological impacts of COVID-19.