Background: Raising awareness of women on danger signs of pregnancy, childbirth and the postpartum period is crucial for safe motherhood. In Ethiopia, a country where maternal morbidity and mortality is high little is known about knowledge level of pregnant women on obstetric danger signs. The objective of this study was to assess pregnant women's knowledge about obstetric danger signs in Aleta Wondo district, Sidama Zone, South Ethiopia. Methods: A community based cross-sectional study was conducted from January 18 – February 20, 2007, on a sample of 812 pregnant women selected from, 8 rural and 2 urban Kebeles. A structured pre-tested questionnaire was used to collect quantitative data on socio-demographic characteristics, obstetric history, and knowledge about danger signs of pregnancy, childbirth and post partum period. Qualitative data was collected through focus group discussion with pregnant women and in-depth interview with traditional birth attendants. The collected data were analyzed using SPSS for Windows version 12.0.1. Results: Seven hundred forty three pregnant women participated in the study making a response rate of 92%. Out of the 743 pregnant women who participated in this study 226 (30.4%), 305(41.3%) and 279(37.7%) knew at least two danger signs during pregnancy, childbirth and postpartum period, respectively. Being urban resident was consistently found to be strongly associated with mentioning at least two danger signs of pregnancy (OR=4.1; 95% CI: 2.4, 7.0), child birth (OR=3.3; 95% CI: 1.8, 6.1), and postpartum period (OR=8.4; 95% CI: 4.5, 15.4). Conclusion: This study indicated that the knowledge level of pregnant women about obstetric danger signs (during pregnancy, childbirth and postpartum period) was low and affected by residential area. Therefore, the identified deficiencies in awareness should be addressed through maternal and child health services by designing an appropriate strategies including provision of targeted information, education and communication.