Abstract Background One of the highest rates of adolescent pregnancies in the world is in sub-Saharan Africa. Most adolescent pregnancies in the region are unintended or unwanted, due to poor access to information and services on sexual and reproductive health for adolescents. Ethiopia has high adolescent fertility rates (AFR) with disparities across socioeconomic subgroups and regions. This study assessed the magnitude and trends of socioeconomic and area-based AFR inequalities in Ethiopia. Methods The 2000 and 2016 Ethiopia Demographic and Health surveys (EDHS) was analyzed using the World Health Organization’s (WHO) Health Equity Assessment Toolkit (HEAT) software. Adolescent fertility rates were disaggregated using three equity stratifiers (economic status, education and residence) and analyzed through four summary measures (Difference (D), Population Attributable Risk (PAR), Ratio (R) and Population Attributable Fraction (PAF)) to assess inequality. To measure statistical significance, point estimates were constructed using a 95% Uncertainty Interval (UI). Results Large socio-economic and urban-rural inequalities were observed within the 16-year period. Adolescents in less well-off socio-economic groups (PAF: -62.9 [95% UI; − 64.3, − 61.4], D: 96.4 [95% UI; 47.7, 145.1]), uneducated (R: 8.5 [95% UI; 4.8, 12.2], PAR: -76.4 [95% UI;-77.7, − 75.0]) and those from rural areas (D: 81.2 [95% UI; 67.9, 94.6], PAF: -74.2 [95% UI, − 75.7, − 72.7]) had a higher chance of pregnancy and more births than their counterparts. Conclusions Socioeconomic (education and economic status) and place of residence determine adolescents’ pregnancy and childbearing. Policies and programs should be directed at preventing child marriage and early fertility so that adolescents continue to access education, sexual and reproductive health care as well as access employment opportunities. More emphasis should be placed on subpopulations with disproportionately higher adolescent pregnancy and childbirth.