Background: Aflatoxins are one family of mycotoxins, which are a naturally occurring toxic by-product. Aflatoxin M1 is the major metabolite product of aflatoxin B1, which is excreted in urine of mammals and gives a reliable indication of recent (24-72 hours) exposure to aflatoxin. Recent evidences suggest several mechanisms through which aflatoxin can impair growth & development. Despite the high prevalence of stunting in Ethiopia, there is no well-established evidence showing individual aflatoxin exposure and its association with stunting in young children Objective: The study assessed aflatoxin exposure and its association with stunting among young children aged 12 to 59 month in Butajira district. Method: A community based cross-sectional study was conducted in Health and Demographic Surveillance Site, Butajira. We used stratified simple random sampling technique to select the study participants. The study included, 332 children aged 12-59 month. The data were collected in the form of questionnaire, height/length measurement and urine samples collection. Aflatoxin M1 analysis was performed by Enzyme-Linked Immunosorbent assay (ELISA) at Ethiopian Public Health Institute laboratory. The data analysis was carried out using STATA and WHO Antro plus. Multiple logistic regression was used to see the association between stunting and aflatoxin exposure level by adjusting for possible confounders. Results: The mean age of children participated in the study was 39+10.9 month. About 62% of the children were exposed to aflatoxin M1 in their urine, at a level ranging from 0.15ng/ml to 0.4ng/ml. Sixty point nine percent (60.9%) of the study participants were stunted. Children with detectable aflatoxin M1 in their urine at a level of 0.4ng/ml were 1.9 times (95% CI: 0.79, 4.46) more likely to develop stunting than those who were not exposed, even though this association was not significant at p-value <0.05 and 95% CI. Conclusion and Recommendation: The study showed a high prevalence of aflatoxin exposure in the study area. This indicates that strategies and regulations focusing mainly on crop management system and food safety measures need to be revised in order to take in to account the measures for control of aflatoxin exposure.