More than 32% of maternal mortality reported in Ethiopia is due to unsafe abortions. Women's knowledge of abortion legislation is a key determinant of the utilization of safe abortion services. The objective of this study was to determine knowledge of abortion legislation and associated factors among female students of Dabat Preparatory School. A quantitative school-based cross-sectional study was conducted from May 25-June 7/2014. Data were collected from 234 randomly selected female students using structured and pre-tested questionnaire. Majority of the participants, 147 (62.8%) know that the law in Ethiopia allows safe and legal abortion under certain circumstances. Ninety-seven (41.5%) of them have poor knowledge towards the legality of induced abortion in Ethiopia. Higher family income (OR=2.63, 95% CI=1.22-5.63), knowing the place where safely induced abortion can be performed (2.51, 95%CI=1.31-4.81) and current use of contraceptive (OR=2.3, 95% CI, 1.1-4.81) are significantly associated with knowledge of the abortion legislation. Student's knowledge of the legal status of abortion is still low. School-based health education about abortion legislation and where it can be safely performed is essential.