BACKGROUND The consequences of undernutrition have serious implication for the health and future reproductive periods of adolescent girls and young women aged 15-24 years. Inspite of this, they are neglected age groups and there is limited information about the nutritional status of this age group in Ethiopia. Therefore, estimating the extent and associated factors of undernutrition among adolescent girls and young women in a national context using multilevel analysis is essential. METHODS Secondary data analysis was conducted from the Ethiopian Demographic and Health Survey 2016. A total sample weight of 5362 adolescent girls and young women was included in this study. A multilevel mixed-effect binary logistic regression model with cluster-level random effects was fitted to determine the associated factors of undernutrition among adolescent girls and young women in Ethiopia. Finally, the odds ratios along with the 95% confidence interval was generated to determine the individual and community level factors of undernutrition. A p-value less than 0.05 was declared as the level of statistical significance. RESULTS Overall, 25.6% (95%CI: 24.5-26.9) of adolescent girls and young women were undernourished. Statistically significant individual level factors includes adolescent girls and young women aged 15-19 years (AOR: 1.53, 95%CI: 1.32-1.77), individual media exposure (AOR: 0.82, 95%CI: 0.69-0.97), and unprotected drinking water source (AOR: 1.24, 95%CI: 1.04-1.48). Whereas, Southern Nations, Nationalities, and Peoples' Region (AOR: 0.33, 95%CI: 0.13-0.83) and rural residence (AOR: 1.69, 95%CI: 1.24-2.32), were community level factors for adolescent girls and young women undernutrition. CONCLUSIONS One quarter of the Ethiopian adolescent girls and young women were undernourished. Therefore, the Ethiopian government should better engage this age group in different aspects of the food system. To improve nutritional status, public health interventions such as increased media exposure for rural residents and interventions that improve access to protected water sources will be critical.