Over the past decade, a dramatic rise in bedbug resurgence has become one of the top potential public health hazards. This study was conducted to determine prevalence, knowledge and self-reported containment practices about bedbugs in the resource-limited setting of Ethiopia. A community based, cross-sectional survey was conducted between January and May 2014. Selected 260 respondents were interviewed by the administration of a pre-tested questionnaire on knowledge and practices about bedbug infestation in the resource-limited setting of Ethiopia. Overall, 91.6% (238/260) of the residents had ample awareness on bedbug infestation. The majority of them (97.2%) extremely bothered about infestations because of bad odors (83.8%), insomnia (79.8%), biting (66.9%), and skin rashes (56.9%). A high prevalence of infestation (72.7%) was observed. Bedrooms and main hall/salon were identified as potential high-risk areas. Chi-square exhibited a strong association between sanitary status and housing conditions (χ2 = 40.91; df = 4; P = 0.0001). Besides, there was a strong association between respondents’ monthly income (χ2 = 42.1; df = 6; P = 0.0001) and educational status (χ2 = 26.01; df = 5; P = 0.0001) with the presence or absence of bedbug infestation. Though the majority of respondents had adequate knowledge, they suffer with deprived practices attributable to deficient resources as well as negligence/ignorance. This study emphasizes the following key interventions: 1) community-based awareness campaigns, 2) implementation of sustainable preventive/containment strategies, 3) educational interventions to ensure translation of knowledge into practices, and 4) the implementation of appropriate poverty alleviation programs to enhance the local-residents living-standard in the future.