Newcastle disease (
ND
) is perceived to be the major constraint in village chickens of Ethiopia causing huge economic loss. Village chickens are mobile and pass through markets, and live chicken markets are a highly productive source of ND virus replication, maintenance, and spread. However, in northwest of Ethiopia, there is a dearth of information on the role of live chicken markets in the maintenance and spread of ND in the village chickens. Therefore, a total of 480 apparently healthy chickens in the 4 live chicken markets were sampled with the aim to detect and estimate ND virus infection. Tracheal and cloacal swabs were collected from each bird and processed for virus isolation in 9- to 11-day-old embryonated chicken eggs, and hemagglutination inhibition (
HI
) assay was performed on all sera samples. The overall infection rate of ND virus was reported to be 39.2% (95% CI: 34.8–43.5). Of all chickens, 34.6% (95% CI: 30.3–38.9) had mean HI titer ≥4 log
2
, which was considered as protective. The mean hemagglutination titer for the ND virus was reported to be 6.0 log
2
, and mean antibody titer was reported to be 6.2 log
2
, with no statistically significant variation among the markets (
P
> 0.05). Newcastle disease occurrence was detected in all seasons of the year in the live bird markets, with the highest prevalence (55.8%) during the prerainy dry season (April and May), showing evidence for climatic and socioeconomic aspects as a risk factor in the occurrence of ND in indigenous chicken. In vivo virulence tests, mean death time of the embryo, and the intracerebral pathogenicity index revealed the presence of all pathotypes of ND virus strains: velogenic, mesogenic, and lentogenic. Apparently, healthy appearing birds were reported to be reservoirs of velogenic ND virus strains that could initiate endemicity of ND cycles in the village setting. Hence, it is strongly recommended to implement appropriate prevention and control measures to mitigate the economic loss caused by the disease.