Mastitis, a disease complex of multiple etiologies, results into considerable financial losses to dairy industry worldwide. A cross sectional study was carried out between July 2013 to August 2013 in Asella town and its surrounding areas in order to determine the prevalence of subclinical mastitis and conducting antibiotic sensitivity test on the isolated pathogens. The study populations comprised of lactating crossbred dairy cows that were found in different age groups, parities and lactation stages. The milk samples were aseptically collected from a total of 780 quarters of teats from 195 apparently healthy cows. The collected milk samples were screened by using Californian Mastitis Test (CMT) and 393 (50.3 %) were found to be positive at quarter level and 100 (51.2%) at cow level. The prevalence of blind teats accounted 7 (0.89%). Only the results of the strong positive (CMT Score > 4) milk samples from the quarters were cultured on the media of blood and Mac Conkey agar plates, and 126/265 (47.5%) yielded microbial growths. The bacterial identification and isolation was done on the basis of colony morphology, microscopic examination of Gram-stained smears, catalase production and biochemical tests. The commonly recovered organisms were Staphylococcus aureus, CNS (Coagulase negative Staphylococcus), Streptococcus agalactae, Streptococcus uberis, Streptococcus intermidius, Proteus spp., Escherichia coli, Corynebacterium bovis, Corynebacterium pyogenes, Micrococcus spp. and Bacillus spp. Among the isolated pathogens, S. aureus, Corynebacterium bovis, Corynebacterium pyogenes and E. coli were the most prevalent that accounted 15.9%, 11.9%, 12.7% and 11.1%, respectively. The results of antibiotic sensitivity test indicated that kanamycin (85.3%), norfloxacilline (61.3%), cloxacillin (56.8%), nitrofurantoin (53.1%) and cloxacilin (56.8%) were found to be sensitive against the total isolates. Substantial resistance of the isolated strains were recorded against cefotaxime, penicillin G, amoxicillin, ampicillin and vancomycin, which accounted 97.9%, 96.4%, 80.4%, 80.2% and 78%, respectively. Staphylococcus aureus revealed resistance against penicillin G, amoxacillin and tetracycline, which accounted 97.9%, 96.4% and 80.4%, respectively and Escherichia coli showed resistance against vancomycin, ampicillin and penicillin G, which indicated 83%, 74% and 65%, respectively. Coagulase Negative Staphylococcus aureus (CNS) were found resistance to penicillin G. Subclinical mastitis is a major disease in the worldwide with economic and public health importance. The routine inspections of subclinical mastitis by using CMT and SCC are imperative and cost effective methods for the diagnosis of mastitis in dairy cows. The isolation of pathogens and conducting of antimicrobial susceptibility tests are essential in order to achieve effective treatment and controlling of the disease and also preventing the development of the resistant bacterial strains. Since misuse of antimicrobials leads to the presence of residues in foods of animal origin, there is a need for stakeholders in the livestock industry and public health sector to intervene urgently on the impacts of drug residues with regards to animal and human health.