The vast majority of sexual intercourses during adolescence are unprotected, and therefore thernrisk of unwanted pregnancy, unsafe abortion, and STIs including HIV/AIDS is very high forrnadolescents. Although various surveys have been made to study the sexual behavior of youth inrnEthiopia, few studies considered the problem of out-of-school and rural adolescents. This crossrnsectional comparative survey was carried out to assess and compare the level of sexual behaviorrnand perception of the risks of sexual activities among urban and rural out-of-school adolescentsrnin South Gondar Administrative Zone, the Amhara Region. A total of 763 out-of-schoolrnadolescents were interviewed and four focus group discussions aggregated by sex andrnresidences were conducted. More than 90% of adolescents in this study were aware ofrnHIV/AIDS. About 42% of the respondents were sexually active. Seventy-six (23.3%) of thernsexually active respondents claimed to have more than one sexual partners. About 25% ofrnsexually active male adolescents visited female commercial sex workers of which only 36 %rnreported ever using condom and none of them reported consistent condom use duringrncommercial sex. Despite this all, participants’ attitude towards perceiving themselves asrnsusceptible to HIV infection indicated that only 11 (5.3%) of the rural and 13 (11.2%) of thernurban sexually active adolescents were aware of being engaged in high risk sexual practices.rnRisk perception to HIV infection was higher in urban adolescents [3.577(1.028,12.449)] than inrnrural. Marital status of respondents, their educational status, and reported number of sexualrnpartners were also associated to their risk perception. The result of the focus group discussionrnincreased our understanding how the socio-economic and cultural environment influencernadolescents’ sexual behavior, and why adolescents are involved with unsafe sexual practicesrneven when they know the risks. Enabling the community to understand adolescents’ sexuality,rnproviding accurate information, and promoting adolescent friendly sexual and reproductivernhealth are essential, even when adolescents are aware of the risks of sexual activities.