Newcastle disease (ND) is a highly contagious disease that affects many species of birds and causes significant economic losses to the poultry industry worldwide. Fifteen Newcastle disease virus (NDV) isolates obtained from rural chickens in northwest Ethiopia in 2011 and 2012 were characterized genotypically. The main functional region of the F gene was amplified and sequenced (260 nucleotides). Among the Ethiopian NDV isolates, 2 isolates had the virulent motif (112)R-R-Q-K-R-F(117) at the cleavage site of the fusion protein while 13 isolates contained the lentogenic motif (112)G-G/R-Q-G-R-L(117). Phylogenetic analysis based on the variable region of the F gene indicated that the two isolates exhibiting the virulent motif belonged to lineage 5 (genotype VII) subgenotype d and the remaining 13 isolates were grouped into lineage 2 (genotype II). The nucleotide sequences of lineage 5 isolates were genetically related to the Sudanese NDV isolates, suggesting potential epidemiological link of ND outbreaks between neighbouring countries. The lentogenic strains shared similarities with La Sota vaccine strain and probably originated from the vaccine strain either through direct exposure of birds to the live vaccine or to infectious La Sota-like strains circulating in rural poultry. This study provides genetic evidence on the existence of different NDV genotypes circulating in the rural poultry in Ethiopia. The virulent NDV continues to be a problem in poultry sector in Ethiopia, and their continuous circulation in rural and commercial poultry calls for improved surveillance and intensified vaccination and other control measures.