Ethiopia is one of the most multilingual nations in Africa today, with a rich history and the vast diversity of its peoples and languages reflect deep cultural and linguistic roots. Of the four major African language phyla, two, Afro-Asiatic and Nilo-Saharan, are represented in Ethiopia, underscoring the country’s linguistic diversity. National multilingualism, therefore, is a defining feature of the Ethiopian nation. Managing this linguistic diversity and addressing demands for the recognition of distinct identities and interests has posed ongoing challenges across successive regimes. Language policy in Ethiopia has developed through varied historical and political contexts, yielding a range of implementation models, from assimilationist strategies to radical multilingual pluralism. This study examines how successive Ethiopian states have managed, institutionalised, codified, and ideologically framed multilingualism. It assesses the extent to which language policies have succeeded or failed in reconciling linguistic diversity with national unity. Focusing on the most recent language policy approved in 2020, the study reviews the historical trajectory of language policy from 1991 to 2020, highlights key implementation challenges, and analyses the features, prospects, and broader implications of the new policy in managing Ethiopia’s complex linguistic landscape.