Background: There is limited national evidence on determinants of early sexual initiation among female youth especially; community level factors are not investigated in Ethiopia. Therefore, this study aimed to assess individual and community level factors associated with early sexual initiation among female youth in Ethiopia. Methods: A secondary data analysis was done on the 2016 Ethiopian Demographic and Health Survey (EDHS) dataset. A total of 6,143 female youth were included in the analysis. Multi-level mixed-effect logistic regression analysis was done by using STATA version 14.0 to identify individual and community-level factors. Adjusted odds ratio along with 95% confidence interval was used to show the strength and direction of association and statistical significance was declared at P value less than 0.05. Results: Individual-level factors significantly associated with early sexual initiation among female youth were; age group from 19-24 years [AOR=5.8, 95% CI= (4.6, 7.3)], not attend school [AOR=14.1, 95% CI= (8.1, 24.7)], ever chew Chat [AOR= 2.0, 95% CI= (1.3, 3.0)]. From community label factors: living in Addis Ababa [AOR= 0.3, 95% CI= (0.2, 0.5)], living in Gambella [AOR=2.7, 95% CI= (1.7, 4.3)] and live in low proportion of poor communities [AOR= 0.7, 95% CI= (0.5, 0.9)] were significantly associated with early sexual initiation among female youth in Ethiopia. Conclusions: Age, low educational status, ever chewing Chat, region and live in high proportion of poor community had statistical association with early sexual initiation among female youth in Ethiopia. Improving educational coverage and community level of wealth status are important intervention areas to delay the age of early sexual initiation among female youth.