Background: In Ethiopia where poverty, war, famine, displacement and homelessness are common, mental health is also becoming a major public health problem. However, little is known about the perception of the public regarding mental health problems. Objective: To describe the awareness and attitude of the public towards mental health problems. Methods: The study used a community-based cross sectional survey conducted in Agaro town in December 2003. Three kebeles were randomly selected and the sample size for each kebele was determined based on probabilities proportional to area size. Data were collected by trained nurses supervised by investigators using a structured questionnaire and analyzed using chi-square and f-tests and the SPSS-11 version window program. Results: A total of 728 people were interviewed with a response rate of 99.5%. Most of the respondents were females (60%), Oromo (38.2%), Orthodox Christians (50.4%), married (71.7%) and housewives (37.7%). Talking to oneself, sleep disturbance, strange behavior and aggression were the most commonly perceived symptoms of mental health problems. Poverty, "God's will", evil spirit and stress were traditionally implicated as causes of mental health problems. A person with an experiencing schizophrenia was perceived as suffering from mental health problems by 74% of the respondents. Only 15% of the study participant recognized major depression as a mental health problem. Educated people preferred modern medicine for the treatment of epilepsy, schizophrenia, major depressive disorder (MDD) and generalized anxiety disorder more often than less educated ones. Less educated people had a negative attitude to marital prospects and work opportunity of schizophrenic patients (p=0.0001). They also had more negative attitude towards educational opportunity a people for with epilepsy (p=0.006). Illiterate respondents had negative attitude more than the literate respondents towards living with persons with epilepsy and schizophrenia in the same house (p=0.001). Conclusion: Information education and traditionally communication (IEC) approaches should be used to teach about the symptoms, causes and treatment of mental health problems to change the irrational beliefs and negative attitude of the people towards mental health problems.