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Ethiopia has about 52 million indigenous goats with marked phenotypic variability, which is the outcome of natural and artificial selection. Here, we obtained whole-genome sequence data of three Ethiopian indigenous goat populations (Arab, Fellata, and Oromo) from northwestern Ethiopia and analyzed their genome-wide genetic diversity, population structure, and signatures of selection. We included genotype data from four other Ethiopian goat populations (Abergelle, Keffa, Gumuz, and Woyto-Guji) and goats from Asia; Europe; and eastern, southern, western, and northern Africa to investigate the genetic predisposition of the three Ethiopian populations and performed comparative genomic analysis. Genetic diversity analysis showed that Fellata goats exhibited the lowest heterozygosity values (Ho = 0.288 ± 0.005 and He = 0.334 ± 0.0001). The highest values were observed in Arab goats (Ho = 0.310 ± 0.010 and He = 0.347 ± 4.35e−05). A higher inbreeding coefficient (FROH = 0.137 ± 0.016) was recorded for Fellata goats than the 0.105 ± 0.030 recorded for Arab and the 0.112 ± 0.034 recorded for Oromo goats. This indicates that the Fellata goat population should be prioritized in future conservation activities. The three goat populations showed the majority (∼63%) of runs of homozygosity in the shorter (100–150 Kb) length category, illustrating ancient inbreeding and/or small founder effects. Population relationship and structure analysis separated the Ethiopian indigenous goats into two distinct genetic clusters lacking phylogeographic structure. Arab, Fellata, Oromo, Abergelle, and Keffa represented one genetic cluster. Gumuz and Woyto-Guji formed a separate cluster and shared a common genetic background with the Kenyan Boran goat. Genome-wide selection signature analysis identified nine strongest regions spanning 163 genes influencing adaptation to arid and semi-arid environments (HOXC12, HOXC13, HOXC4, HOXC6, and HOXC9, MAPK8IP2), immune response (IL18, TYK2, ICAM3, ADGRG1, and ADGRG3), and production and reproduction (RARG and DNMT1). Our results provide insights into a thorough understanding of genetic architecture underlying selection signatures in Ethiopian indigenous goats in a semi-arid tropical environment and deliver valuable information for goat genetic improvement, conservation strategy, genome-wide association study, and marker-assisted breeding.