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Malaria cases are frequently recorded in the Ethiopian highlands even at altitudes above 2000 m. The epidemiology of malaria in the Ethiopian highlands, and, in particular, the role of importation by human migration from the highly endemic lowlands is not well understood. We sequenced 187 Plasmodium falciparum samples from two sites in the Ethiopian highlands, Gondar (n = 159) and Ziway (n = 28), using a multiplexed droplet digital PCR (ddPCR)‐based amplicon sequencing method targeting 35 microhaplotypes and drug resistance loci. Here, we characterize the parasite population structure and genetic relatedness. We identify moderate parasite diversity (mean HE: 0.54) and low infection complexity (74.9% monoclonal). A significant percentage of infections share microhaplotypes, even across transmission seasons and sites, indicating persistent local transmission. We identify multiple clusters of clonal or near‐clonal infections, highlighting high genetic relatedness. Only 6.3% of individuals diagnosed with P. falciparum reported recent travel. Yet, in clonal or near‐clonal clusters, infections of travellers were frequently observed first in time, suggesting that parasites may have been imported and then transmitted locally. 31.1% of infections are pfhrp2‐deleted and 84.4% pfhrp3‐deleted, and 28.7% have pfhrp2/3 double deletions. Parasites with pfhrp2/3 deletions and wild‐type parasites are genetically distinct. Mutations associated with resistance to sulphadoxine–pyrimethamine or suggested to reduce sensitivity to lumefantrine are observed at near‐fixation. In conclusion, genomic data corroborate local transmission and the importance of intensified control in the Ethiopian highlands. [ABSTRACT FROM AUTHOR]