Background Group B streptococci (GBS) is an important pathogen involved in stillbirths, neonatal deaths and neurological defects, and the occurrence of multi-drug resistance (MDR) is an alarming issue. This study determined the prevalence of GBS colonization in pregnant women and newborns, the proportion of vertical transmission, antimicrobial susceptibility profiles of isolates, and the factors associated with colonization and vertical transmission. Methods A cross-sectional study was conducted from March 1, 2021 to June 30, 2021, at selected health facilities of Bahir Dar city. Vaginal-recto swabs from 292 pregnant women and pooled ear, nasal and umbilical swabs from 292 newborns were collected. GBS were identified following standard microbiological protocols. Antimicrobial susceptibility testing was performed using modified Kirby–Bauer disk diffusion method and interpreted by the accepted 2020 CLSI M100 guidelines. Logistic regression analysis was computed. Results Overall, 54 (18.5%) of pregnant women and 22 (7.5%) of newborns had GBS colonization. The proportion of GBS vertical transmission was 22 (40.7%). Group B Streptococcus isolates scored susceptibility to penicillin, ampicillin and vancomycin with 88.9%, 90.7%, and 96.3% for pregnant women and 86.4%, 90.9% and 95.9% for newborns, respectively. A high percentage of non-susceptibility was found for clindamycin and erythromycin with 33.3% and 25.9% for pregnant women and 31.8% and 22.7% from newborns, respectively. Besides, 19 (35.2%) GBS from pregnant women and 8 (36.4%) from newborns were MDR. Group B streptococci colonization was significantly associated with delivery before 37th week of gestation (AOR=2.77, 95% CI 1.14–6.68) and history of stillbirth (AOR=3.13, 95% CI 1.13–8.70). Conclusion Pregnant women vaginal-recto GBS colonization and transmission to newborns connected with MDR are a matter of concerns. Although non-susceptible GBS isolates are obtained, penicillin and vancomycin are relatively effective. The use of clindamycin, erythromycin and ceftriaxone should be guided by antimicrobial susceptibility testing. Genetic analysis is recommended to exactly identify the epidemiology of GBS strains, vertical transmission and antimicrobial resistance at the country level.