This thesis adopts a state-centric perspective to analyze the onset of armed conflict and civil war in Ethiopia. The ongoing conflict in Ethiopia serves as a single instrumental case study. Despite a large body of research on explanations of civil war, there is no consensus on factors and their salience that are generalizable and applicable to civil war occurrences as it is difficult to encapsulate the myriad dynamics at play. This case study focuses on Ethiopia because of the recent onset of civil war and its rare governance structure of ethnic federalism. The thesis focuses on how the state´s structural arrangement has impacted the politicization of ethnicity and (perceived) ethnic-based inequality and how the recent political transitions relate to this. The analysis concludes that ethnic federalism brought long-term ramifications and has resulted in inter-group animosity. It has accentuated mono-identities and government practices have contributed to ethnic fragmentation and ethnic tensions because of resulting horizontal inequalities. The political transition in the past years has failed to alleviate these tensions as repressive state practices, ethnic-based demands and mobilization as well as ethnic-based politics continue.