Trachoma is a serious public health concern and cause of blindness globally. Despite its vulnerability to all ages, children are more vulnerable to its adverse outcomes and devastating complications. This study assessed the magnitude of trachoma among children in host and refugee communities in Gambella, Ethiopia. A community-based comparative survey was done among 743 participants. Multistage sampling technique was used to select participants. Selected children were examined for trachoma using a 2.5x binocular loupe and graded using the World Health Organization (WHO) simplified grading system. A standardized, structured, and pretested tool was used to collect the data. Data were collected through interviews and observation. Bivariable and multivariable logistic regression analyses were done to identify the associated factors. Variable with a p-value <0.05 was considered statistically significant. The magnitude of active trachoma was 119 (16.5%; 95% CI: 13.5, 21.4) with 36 (14.5%; 95% CI: 11.9, 18.8) and 83 (17.5%; 95% CI: 14.3, 22.7) from refugees and host communities, respectively. Poor knowledge of caregiver about trachoma [AOR = 3.55, 95% CI: (1.48, 8.85)], presence of human feces near the house [AOR = 4.57, 95% CI: (1.84, 11.34)], presence of garbage near the house [AOR = 4.07, 95% CI: (1.34, 12.36)], and the presence of flies on the face of the child [AOR = 3.42, 95% CI: (1.32, 8.84)] were significantly associated factors with active trachoma. Overall, one-sixth of children had experienced active trachoma. The magnitude of trachoma was higher in the host community compared to the refugees. Proper waste disposal and personal hygiene measures are important measures that should be addressed to tackle the problem.