Background. In Ethiopia, up to 80% of the population use traditional medicine for primary health care. Studies on the current knowledge and practices of communities in the era of modern health care expansion are lacking. Therefore, this study is aimed at assessing the knowledge, attitude, and practice of traditional medicine among communities in Merawi town. Methods. A descriptive cross-sectional study was carried out among 403 residents of Merawi town. A systematic random sampling was used to select households. Data was collected through house to house interview. Results. 392 out of 403 questionnaires were analysed. Among the participants, 220 (56.1%) were female. The mean (±s.d.) age of the participants was 32.5 (±12.4) years. Nearly two-thirds, 241 (61.5%), of study participants have good knowledge about traditional medicines. Three-quarters of participants prefer modern medicine to traditional drugs. 70.9% of participants had the experience of personal use of traditional therapies. Conclusions. The population in Merawi has good knowledge with high acceptability and use of traditional medicine. The main reasons for high acceptability and practice were cultural acceptability, lesser cost, and good outcome of traditional medicine.