Background: Treatment failure (TF) among patients receiving antiretroviral therapy (ART) against human immunodeficiency virus (HIV) impacts on treatment outcome and is becoming a public health concern globally. However, magnitude of TF and factors leading to it are poorly defined in the context of Ethiopia. Thus, the aim of this study was to determine the magnitude of TF and assess its determinants among HIV-infected patients on ART in Ethiopia. Methods: A prospective and retrospective study was conducted from March 2016 to 2017. Retrospective clinical and laboratory data were captured from patients’ medical record. Socio-demographics and explanatory variables of participants were collected using pre-tested structured questionnaire and study participants were followed for additional 6 month after baseline viral load has been done to classify virologic failure (VF). Multiple logistic regression was conducted to assess risk factors associated with TF. Statistical significance was set at P-value less than 0.05. Results: A total of 9,284 adults taking ART from a nationally representative 63 health facilities were included in the study. Viral Load Suppression (VLS) (VL1000 copies/ml at baseline of the study were re-suppressed after six months of enhanced adherence and counseling, leading TF among population on ART in Ethiopia to be 983 (11%). Immunologic and clinical failure was significantly improved from 21.5% and 16.5% at ART initiation to 576 (6.2%) and 470 (5.0%) at baseline of the study, respectively. Medication adherence, disclosure of HIV status, missed appointment to ART, history of ART exposure prior to initiation, residency and marital status had significant association with TF. Conclusions: The high level of VLS (88.1%) could explain the success of ART program in Ethiopia towards achieving the UNAIDS global target on viral suppression. TF among population taking ART in Ethiopia is still a public health concern, since 11% of virally failed population is maintained on failed first-line regimen. However, a significant improvement on immunologic and clinical outcome after ART initiation was maintained. Close follow-up of medication adherence, ensuring disclosure of HIV status, regular appointment follow-up to ART could significantly improve the treatment outcome of population on ART in Ethiopia.