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Abstract Background The prevalence of drug resistant tuberculosis (TB) in Ethiopia in general, and Jimma area in particular, is not well documented. We conducted a study at Jimma University specialized hospital in southwest Ethiopia among new cases of smear positive TB patients to determine the pattern of resistance to first-line drugs. Methods A health institution based cross sectional study was conducted from November 2010 to September 2011. Any newly diagnosed smear positive TB patient 18 years and above was included in the study. Demographic and related data were collected by trained personnel using a pretested structured questionnaire. Mycobacterial drug susceptibility testing (DST) to the first line drugs isoniazid (INH), rifampicin (RIF), ethambutol (EMB) and streptomycin (STM) was performed on cultures using the indirect proportion method. M. tuberculosis complex (MTBC) was identified with the Capilia TB-Neo test. Results 136 patients were enrolled in the study. Resistance to at least one drug was identified in 18.4%. The highest prevalence of resistance to any drug was identified against INH (13.2%) followed by STM (8.1%). There was no statistically significant difference in the proportion of any resistance by sex, age, HIV status and history of being imprisoned. The highest mono resistance was observed against INH (7.4%). Mono resistance to streptomycin was associated with HIV infection (crude OR 15.63, 95%CI: 1.31, 187). Multidrug-resistance TB (MDR-TB) was observed in two patients (1.5%). Conclusion Resistance to at least one drug was 18.4% (INH-13.2% and STM-8.1%). STM resistance was associated with HIV positivity. There was relatively low prevalence of MDR-TB yet INH resistance was common around Jimma. The capacity of laboratories for TB culture and DST should be strengthened, in order to correctly manage TB patients and avoid amplification of drug resistance.