A cross-sectional study was conducted from November 2016 to April 2017 with the objective of assessing the welfare situation and identifying major health problem of donkeys in association with risk factors identification using physical examination and questionnaire survey in and around Hawassa town, Southern Ethiopia. Three hundred and eighty four donkeys were physically examined for health related and management problems and three hundred and eighty four donkey owners and cart drivers were interviewed for awareness and welfare assessment in the study area. Out of the total 384 donkeys, the prevalence of wound, lameness, skin problem, other illness signs, eye problem, dental problem and change on visible mucous membrane were found in 47.7, 38.8 36.2, 14.3, 9.4, 7.6 and 6.3%, respectively. Statistically significant (p<0.05) association was observed between the occurrence of wound and age, type of work, duration of work and body condition of the study animals. The prevalence of wound in old age groups, poor body conditioned animals, donkeys that transport construction material and those working for more than 10 h were 76.6, 74.6, 71.2 and 93.8%, respectively. Furthermore, the welfare problems association with donkey users' ownership status, age, and educational status were assessed and 51.3% of cart drivers' owners, 47.1% young drivers and 62.2% had educational status under grade four and have little experience on handling working donkeys. Out of 384 respondents, 63.2% were not aware of common animal welfare freedoms. The health and welfare problems of cart pulling donkeys in the study area were created and complicated with multiple influential factors. The whole community should participate on awareness creation, introduction of improved design of harnesses and carts, also training on animal welfare to owners should be given to reduce health and welfare problems on donkeys.