Background: Schizophrenia is a severe and disabling chronic mental disorder and accompanied by different levels of a perceived stigma that affects almost all age groups. This perceived stigma negatively impacts the quality of life, physical, and mental well-being of people with schizophrenia. It is also linked with a poor level of functioning, poor adherence to drugs, and increased dropout rate. However, research into perceived stigma and associated factors among people with schizophrenia in low-and middle-income countries are limited. Therefore, this study aimed to explore the perceived stigma and correlates among people with schizophrenia in Ethiopia. Methods: An institution based cross-sectional study was conducted from May to June 2018. A structured, pretested, and interviewer-administered questionnaire was used to collect data. The standardized perceived devaluation and discrimination questionnaire was used to assess perceived stigma. The systematic random sampling technique was used to select study participants. Binary logistic regression analysis was used to identify factors associated with perceived stigma. An odds ratio (OR) with a 95% confidence interval (CI) was computed to assess the strength of the association. Results: The prevalence of high perceived stigma was found to be 62.6% [95% CI 58.3, 67.4]. In the multivariate logistic regression, female sex [AOR = 2.30, 95% CI 1.42, 3.71], age of onset of schizophrenia [AOR = 1.85, 95% CI 1.19, 2.89], multiple hospitalizations [AOR = 1.7, 95% CI 1.16, 3.27], and duration of illness 1-5 years [AOR = 2, 95% CI 1.01, 3.27], 6-10 years [AOR = 2.48, 95% CI 1.29, 4.74], and ˃10 years [AOR = 2.85, 95% CI 1.40, 5.79] were factors significantly associated with higher perceived stigma. Conclusion: In the present study, the prevalence of high perceived stigma among people with schizophrenia was found to be 62.6%. Female sex, age of onset of schizophrenia, multiple hospitalizations, and duration of illness were factors significantly associated with higher perceived stigma. Measures to enhance the awareness of the patients, their families and their social networks about perceived stigma and associated factors, by the leading government and healthcare institutions are warranted.