A cross-sectional study design was used to assess sexual-risk behaviour and HIV-preventive practices among students at Hawassa University, Ethiopia, in 2009. Among 1 220 students eligible for the study, approximately 29% reported experience of sex (36.3% of the males and 9.3% of the females). Of the total sexually active respondents, 67.1% had begun sexual activity while still in secondary school. For the previous 12-month period, 42.1% said they did not use condoms during the last sexual encounter, 46.1% of the males claimed having had sex with ‘bar ladies,’ and 39% said they had an active symptom of a sexually transmitted infection (STI). Logistic regression analysis demonstrated a significant association of higher-risk sexual practices in the previous year with being female and having an income greater than US$30/month. Having multiple sexual partners was strongly associated with being female, having a monthly income greater than US$30, a sexual debut before age 18 and before attending university, ever having had sex for the sake of money, active STI symptoms, and attending nightclubs. Overall, the students reported sexual practices that were considerably unprotected; we surmise that this likely exposed approximately two-fifths to STIs and nearly 10% to unplanned pregnancy. We conclude that to alter university students’ sexual-risk behaviour, a great deal of relevant intervention should be carried out during earlier school years, and the observed link between a greater frequency of sexual-risk behaviour and higher income needs to be investigated.