Despite remarkable progress in the reduction of under-five mortality, the rate of perinatal and neonatal mortality is still high especially in developing countries. The adverse outcome associated with preterm birth is one of the major public health challenges in Africa. However, there are limited and inconsistent studies conducted on the effect of preterm birth on adverse perinatal and neonatal outcomes in Ethiopia. Therefore, this systematic review and meta-analysis aimed to investigate the association between preterm birth and its adverse perinatal and neonatal outcomes in Ethiopia. We systematically searched several electronic databases like PubMed, Web of Science, SCOPUS, CINAHL, Google Scholar, African Journals Online databases and Science Direct. All identified observational studies were included. The I ¹ statistics were used to assess the heterogeneity among the studies. A random-effects model was computed to estimate the pooled effect of preterm birth on adverse perinatal and neonatal outcomes. Thirty-three studies with a total of 20 109 live births were included in the final meta-analysis. Our meta-analysis showed that preterm birth increased the odds of perinatal mortality by 10-folds [POR = 9.56 (95% CI: 5.47, 19.69)] and there was a 5.44-folds risk of stillbirth [Odds Ratio = 5.44 (95% CI: 3.57, 8.28)] among women who gave birth before 37 weeks of gestation. In addition, preterm birth was significantly associated with neonatal hypothermia [OR=3.54 (95% CI: 2.41, 5.21)], neonatal mortality [OR= 3.16 (95% CI: 1.57, 6.34). The sub-group analysis of this meta-analysis showed that there was an increased risk of neonatal sepsis [OR=2.33 (95% CI: 1.15, 4.71)] among preterm babies. Preterm births significantly increased the risk of adverse perinatal and neonatal outcomes in Ethiopia. Therefore, scale-up strategies and improving the quality of maternal and child health care providers should be an area of intervention to reduce adverse outcomes associated with preterm birth. The Federal Ministry of Health and concerned bodies should work towards the prevention of preterm birth and its adverse outcomes.