Rice (Oryza sativa L.) is the most widely cultivated cereal crop in the world after wheat, and produced in a wide range of locations and climatic conditions. In the context of Ethiopia, despite a vast arable land and favorable agroclimatic conditions, the productivity of rice is very low (27 Q/ha) due to several factors. Studies were therefore,conducted in two phases: household survey and field experiment, to particularly determine the postharvest losses due to harvesting, threshing, cleaning and drying, milling and storage. Primary data were collected from 70-farm householdrespondents using a semi-structured questionnaire and 5-field samples practically. Farmers, based on the results, were found to be aware of postharvest losses but believed this as a natural phenomenon and that they can do nothing to reduce it. Most of respondents (98.6%) indicated that the local storage material (Gotta/Gottera) and polypropylene (PP) bags caused the highest and the PICS (Purdue improved crop storage) the lowest loss of paddy grains. Milling was the major source of postharvest losses with 94.3% of the respondents expressing this view followed by postharvest losses due to other postharvest operations. The results of field-experiment revealed the mean loss of 3.04% during harvesting, 3.84% during threshing, 1.11% during cleaning and drying, 2.4% during storage and 5.87% during milling. On the other hand, the milling recovery of 67.86%, 76.8% and 80.13% were obtained for white, brown and parboiled rice, respectively. A mean postharvest losses of 14.87% ranging between 10.29 to 27.06%was recorded which was in agreement with farmers awareness. Improvement in postharvest extension services, introduction of small scale postharvest technologies, promotion of PICS are recommended for enhancing rice yield in this country.