Abstract Inter-ethnic relations may have cordial and constructive nature in certain cases; in other cases, it can be violent, conflictual and destructive. The main objective of this study was to examine the nature of inter-ethnic relations and conflict management between Amhara and Oromo communities in Ataye town, North Shoa Zone of Amhara region. To achieve this objective, the study employed a qualitative research approach and case study design. The study used primary and secondary sources. Primary data was collected through in-depth interviews, FGDs and personal observation. To select key informants and FGD discussants, non-probable sampling, particularly purposive and snowball sampling techniques were employed. The thematic analysis method was applied to analyze the collected data. The finding of the study shows that, before 1991, Amhara and Oromo communities had cordial relations in Ataye town. There was not violent ethnic conflict despite some sporadic conflicts related to grazing land, cattle riding and tradition around the town. After 1991, the two communities were separated into two woredas. From 1991-2018, their relation has been weak compared to the past. After the 2018 political reform, their relation has been conflictual. In March 2019, violent ethnic conflict occured between two ethnically mobilized actors-Amhara and Oromo, in Ataye town. The politicization of ethnicity was the main root cause of the conflict. Besides, the manipulation of ethnicity by ethnic entrepreneurs; the weakness of local government; the conspiracy of former local government officials; the illegal trafficking of arms; the claim over Ataye town; and uncertainty were the major causes. Moreover, the Militia training given by Ephrata Gidim woreda was the main immediate cause. However, the conflict was resolved by local elders through Shimgillina. Currently, the relation between the two communities in Ataye town is on the way to a peaceful situation. But still, they have distrust and suspecting towards each other. In a nutshell, their ethnic difference by itself was not a cause for violent ethnic conflict and hostile inter-ethnic relations between Amhara and Oromo communities in Ataye town, rather it has been politicized and instrumentalized. Key Words: Amhara, Oromo, Ataye, community, ethnicity, ethnic conflict, ethnic group, interethnic relation,