Background: Youth employment presents a particular challenge to Ethiopia; the country faces growing youth landlessness in rural areas and insignificant rural job creation, potentially leading to an increase in migration to urban areas. Objective: The main objective of this study is so to identify and describe the determinants of youth unemployment in Ethiopia. Design: The sampling technique employed was multistage stratified cluster sampling. Results: The study is made based on the 2011 Ethiopian Demographic and Health Survey (DHS) which was conducted by Central Statistical Agency (CSA) of Ethiopia. The analyses result revealed that about 10.4% of the youth are unemployed while 89.6% are employed. The regional variations, access to electric power, age, gender, access to market information, economic status of their families and youth’s educational level are found to be the significant determinants of youth unemployment in Ethiopia. Conclusion: The government should facilitate formalization of informal employment sector in order to motivate more youth to engage in different activities which are currently considered to be informal. This will help to reduce the problem of youth unemployment especially on skilled and educated youth in both urban and rural areas.