In the present study, an attempt has been made to compare physical fitness components namely cardio respiratory fitness, agility, flexibility, power, speed and strength endurance between students belonging to rural and urban set-ups and its correlationwith academic performance. The researcher was used acausal comparative design of the study. The researcher was used purposive sampling technique to select the two schools among four secondary schools which found in machakillworeda. Thisstudy was carried out on 80 students, 40 from rural and 40 from urban of Amanuael versusGira-Kidamin secondary school in machakilWoreda.This was selected by stratified random sampling technique. The data were collected by the use of measurements by application of 1.5 mill run test, Illinois agility run test, sit and reach test, shot put test, 50m sprint run test and 90 degree push up test. In order to gather data about the student’s academic performance, the researcher had taken examination/test results and teacher reported conduct grade which was recorded in 2010 E.C academic year first semester from the registrar office.To compare the difference in physical fitness level between the two groups, and determine the relationship between physical fitness and academic performance, the data were analyzed and compared by statistical package for the social science (IBM SPSS version 23). In the procedure, arithmetic means, standard deviation and independent sample “t’ test were used to compare the data of selected physical fitness variables between rural vs. urban students. As a result “p” value anticipated being valid either less than or greater than 0.05 on two side tests were considered statistically significant. While the relationships of the physical fitness levels with academic performance was determined by Pearson correlation coefficients. As a result “r” value anticipated being valid either less than or greater than 0.5 on two side tests were considered statistically correlated. Rural students were found to be superior in CRF, strength endurance, and power. Urban students on the other hand, were found to be better and superior in flexibility and agility. But, there was no significance difference in speed. When the researcher have seen the relationship of fitness variable with academic performance in person correlation, CRF, agility, speed and strength endurance correlate to academic performance negatively but statistically insignificant. The rest power and flexibility correlate to academic performance positively but statistically insignificant.