Middle East respiratory syndrome coronavirus (MERS-CoV) is enzootic in dromedary camels and causes zoonotic infection and disease in humans. Although over 80% of the global population of infected dromedary camels are found in Africa, zoonotic disease had only been reported in the Arabia Peninsula and travel-associated disease has been reported elsewhere. In this study, genetic diversity and molecular epidemiology of MERS-CoV in dromedary camels in Ethiopia were investigated during 2017–2020. Of 1766 nasal swab samples collected, 61 (3.5%) were detected positive for MERS-CoV RNA. Of 484 turbinate swab samples collected, 10 (2.1%) were detected positive for MERS-CoV RNA. Twenty-five whole genome sequences were obtained from these MERS-CoV positive samples. Phylogenetically, these Ethiopian camel-originated MERS-CoV belonged to clade C2, clustering with other East African camel strains. Virus sequences from camel herds clustered geographically while in an abattoir, two distinct phylogenetic clusters of MERS-CoVs were observed in two sequential sampling collections, which indicates the greater genetic diversity of MERS-CoV in abattoirs. In contrast to clade A and B viruses from the Arabian Peninsula, clade C camel-originated MERS-CoV from Ethiopia had various nucleotide insertions and deletions in non-structural gene nsp3, accessory genes ORF3 and ORF5 and structural gene N. This study demonstrates the genetic instability of MERS-CoV in dromedaries in East Africa, which indicates that the virus is still actively adapting to its camel host. The impact of the observed nucleotide insertions and deletions on virus evolution, viral fitness, and zoonotic potential deserves further study.