The objective of this study was to determine the epidemiological and clinical features of rotavirus infection among children aged less than 5 years in rural southern Ethiopia. We conducted a hospital-based, prospective study among children aged less than 5 years with acute diarrhea and moderate to severe dehydration attending the outpatient department of Gambo Rural Hospital, Ethiopia during September-November 2012. Three hundred fourteen children were included in the study, of whom 137 (43.6%) had rotavirus infection. The average age of children with rotavirus infection was lower than those without it [odds ratio (OR): 0.94]. Finding severe dehydration on skin pinch test (adjusted OR: 3.76) and having diarrhea for !3 days (adjusted OR: 2.50) were associated with rotavirus infection. The mortality rate was 4.4% among rotavirus infection children and 0% among non-rotavirus diarrhea cases (p=0.006). Rotavirus infection should be suspected in children with severe dehydration on a skin pinch test and among those presenting with diarrhea for 3 days in rural southern Ethiopia.