Ethiopians were brewing long before any brewery was built. Tella, the home-brewed beer of the northern and central highlands, was made by women from sorghum, maize, wheat or teff and got its bitterness from gesho, a highland shrub, not from hops. It was brewed for church feasts, weddings, baptisms and funerals, and it is still made at home and sold in tella houses. Honey wine (tej) and the distilled araqi were the other traditional drinks. Bottled beer came in as an import and until the 1920s stayed out of reach of ordinary people, restricted to royalty and some foreigners.

The first brewery, St. George, was founded in Addis Ababa in 1922 by Mussie Dawit Hale on land near Mexico Square. It made 200 to 300 half-litre bottles a day in its first year, and by the 1950s its capacity was 50,000 hl. Accounts of 1936-1941 differ. Brewery History says it was either closed or run by the Italians at 3,000 to 4,000 bottles a day; a Mautner Markhof family history says two Austrian cousins of that brewing family bought the run-down plant in 1937, rebuilt it and brewed from 1938. Hale sold the brewery to the government on 1 August 1952. In Asmara, then the country's second city, the Italian engineer Luigi Melotti founded a brewery in 1939 (first bottled beer in 1942); it counted as Ethiopian from the federation of 1952. The third, Meta Abo, was agreed by its founding shareholders on 18 February 1965, at Sebeta, 30 km from the capital, and brewed from June 1967 with 50,000 hl a year.

In 1974-75 the state took over all three; St. George became Pilsner and then Addis Brewery. Output rose by 92% between 1976 and 1982, and two more state breweries were built with Czechoslovak equipment and technicians: Harar in 1984 and Bedele, begun in 1988 and brewing from November 1993. A bottle cost 0.50 birr, and beer was shared out by regional quota, so most places had a single brand. When Eritrea became independent in 1993, Melotti stayed there as the Asmara Brewery. Privatisation began in 1998, when St. George went to BGI Ethiopia of France's Castel group, which built a second plant at Kombolcha. Heineken bought Harar and Bedele in 2011 and opened a 110-million-euro brewery at Kilinto on 16 January 2015, with 1.5 million hl and the Walia beer launched in 2014. Diageo bought Meta Abo in January 2012 for 225 million US dollars and tripled it to 1.7 million hl. Ethiopian share companies followed: Dashen at Gondar (2000; the UK's Duet took the majority in 2012), Raya at Maychew (2010; brewing from 2014; wholly BGI since 2017), Habesha at Debre Birhan (2009; Dutch Bavaria joined; beer since July 2015), Zebidar near Wolkite (January 2017; BGI bought the Belgian 58% in 2018) and Anbessa at Modjo (May 2019). Consumption doubled from 1.5 to 3.1 million hl between 2010 and 2015.

In January 2022 Diageo agreed to sell Meta Abo to BGI; approval came in April 2022 and BGI put some 500 million birr into the plant. Raya, shut since November 2020, brewed again from March 2023. In May 2025 Heineken Ethiopia announced a 26-million-euro upgrade of Kilinto to lift its output by 20% to 4.5 million hl. In June 2025 Kegna Beverages, a share company with over 5,000 shareholders, launched Kegna Premium Lager from a new 3-million-hl brewery at Ginchi. The market then had six brewers and 14 plants with 18 million hl of capacity, but output in 2025 was estimated at only 11 million hl, and malt beer carries a 40% excise tax. Habesha, about 64% owned by Bavaria Overseas (the Dutch Swinkels group), was preparing in 2025 to list on the Ethiopian Securities Exchange.