Escherichia coli is a major foodborne pathogen worldwide. This study was conducted to assess the prevalence, risk factors, and antimicrobial susceptibility of E. coli and E. coli O157 in milk and milk products and hygienic practices in West Shoa, Oromia, Ethiopia. Five hundred fifty-six milk samples comprising 421 udder milk, 57 bulk tank milk, and 78 milk products were investigated. Moreover, a questionnaire was administered to 145 participants to assess hygienic practices. A standard microbiological procedure was used to detect E. coli and E. coli O157. The Kirby Bauer disc diffusion method was used to test the antimicrobial susceptibility of the isolates. Petri film plates were used to enumerate the coliform in raw bulk tank milk. Farm and animal-level E coli prevalence were estimated and association with risk factors was assessed. Escherichia coli was detected in 33.8% (95% confidence interval (CI) 29.9–37.9%) of the samples, of which only one isolate (0.2%) was E. coli O157. Escherichia coli contamination was higher in bulk tank samples (47.4%; 95% CI 34.0–61.0%) than in udder milk (34.7%; CI 30.1–39.4%), cottage cheese (27.0%; 95% CI 14.6–43.9%), and yoghurt 10.5% (95% CI 2.9–24.8%). For the animal-level E. coli contamination, only the study area was identified as a risk factor. Risk factors such as types of milk containers, udder washing practices, hygiene, and management systems were associated with both farm-level and milk products E. coli contamination. Most (59.0%) of the farmers practice udder washing only before milking and the remaining did not practice udder washing at all. The mean coliform count in raw bulk tank milk was higher than the international standard (4.09 log10 CFU/ml). All the 42 E. coli isolates tested were multidrug resistant. The occurrence of E. coli is high, while that of E. coli O157 is too low. The milk-handling practices are poor in the study areas. The high prevalence of E. coli, as well as the high coliform count and higher multi-drug resistance may pose risk to public health and food safety. Therefore, proper hygienic practices throughout the milk chain as well as rational drug use are advised.