Background: There is paucity of data on the smoking habits of rural populations in developing countries. This study aimed to explore cigarette smoking practices of a rural community in Ethiopia. Methods: A community based cross-sectional study was conducted among 548 individuals from a random sample of households in a rural town and its surrounding rural districts. Descriptive statistics and logistic regression were performed. Results: Twenty-eight percent (95% CI: 24.3% - 31.6%) of the respondents were current smokers. A total of 105 (68%) smokers expressed an interest to quit while 37 (34%) had tried to quit previously but without success. There was high exposure to second-hand smoke: 285 (52%) homes allowed indoor smoking, and in 181 (33%) indoor smoking took place daily. Current smoking was strongly associated with male sex (OR = 83.0; 95% CI: 11.5 - 599.0), and being a student was found to be protective of smoking (OR = 0.04; 95% CI: 0.005 - 0.05). Conclusion: Cigarette smoking is prevalent among the male rural town population in Ethiopia. In addition, a high level of exposure to indoor second-hand smoke exists. There is a need for investment in rural tobacco control, including educational campaigns and cost-effective smoking cessation services.