ABSTRACT This study was carried out from November, 2010 to March, 2011 to determine the prevalence of fasciolosis, costs incurred due to liver condemnation and to evaluate the sensitivity of direct sedimentation technique for the diagnosis- of fasciolosis in cattle and sheep slaughtered in Bahir Dar municipal abattoir and Azwa hotel, respectively. Of 768 faecal samples examined and 768 livers .3l c;) and sheep ( !6 () ). significant (X2 = 72.171; p = 0.000) difference in liver between cattle inspected, prevalence rates of 2 l.22%; in cattle and 3 l.I 2<k in sheep were found. There was statistically There was also significant variation (p < 0.05) among different sex and age groups of ovine fasciolosis. According to the intensity of pathological lesions in affected livers of bovine, 60 (34.48%) constituted "severely affected; the rest, 71 (40.8%) and 43 (24.71 %) were moderately and lightly affected, respectively. The number of flukes recovered in moderately affected livers was higher (Mean = .. 74.52) than in either severely (Mean = 65) or lightly (Mean = 17.51) affected livers. Species · identificati5m revealed that Fasciola hepatica was more prevalent (69.54 and 76.92%) than Fasciola · -." gigantica (14.37 and 13.85%) and unidentified immature fluke (16.09 and 9.23%) in cattle and sheep, respectively. Taking liver examination as gold standard for diagnosis of fasciolosis, the sensitivity of direct sedimentation· technique was found to be 69.54 and 64.61 % and the specificity (both JOO(fo) with substantial .agreernent (k = 0.74 and 0.76) b~ween the two methods in cattle and sheep, respestively." The average economic loss as a result of liver condemnation was 198,457.80 and 3,745.76 Ethiopian Birr (11.883.70 and 224.30 USD) in cattle and sheep, respectively per annum, indicating that the disease is economically important. Finally, the abattoir based prevalence recorded in the study area and the loss incurred suggest that a detailed epidemiological study as well as assessment of the overall economic loss due to fasciolosis is required to implement systematic