This study examined factors affecting agricultural technology adoption and its impact on farming householdsâ€™ welfare in rural Ethiopia. Agricultural technology adoption can positively contributes to the welfare of smallholder farming households via improving crop yield and productivity. However, in most of the rural areas of Ethiopia the adoption rate is very low. Therefore, this study examines the determining factors in adopting agricultural technologies and its implied impact on welfare status of farming households. The study utilizes balanced panel data of Ethiopian Socio-economic Survey (ESS); which was collected by CSA of Ethiopia in collaboration with the World Bank in three rounds of wave during 2011/12, 2013/14 and 2015/16 in all regions of the country. The study employed logistic regression model as estimation criteria and the casual impact of technology adoption estimated by Difference-in-Differences combined with Propensity Score Matching (DID-PSM) techniques so as to assess the results robustness and their implied impact on householdsâ€™ welfare. This helps to estimate the true welfare effect by cÎ¿ntrÎ¿ling unobserved heterogeneity and handle the problem of selection bias in treatment effects. The results show that adopters of agricultural technology had higher nominal total consumption expenditure per adult equivalent, per capita food consumption expenditure and per capita non-food consumption expenditure than non-adopter but the change was insignificant on per capita education expenditure; and this confirms that adoption of agricultural technologies has a positive and significant impact on household's consumption apart from per capita education expenditure. The study concluded that the need of a wide-ranging policy framework to confront constraints that promote the adoption of agricultural technologies so as to improve welfare of farming households in rural Ethiopia.