A cross-sectional study was carried out from November 2014 to April 2015 to determine the prevalence and antimicrobial resistant situation of Staphylococcus aureus with assessment of associated potential risk factors at selected dairy farms in Holeta area, western Ethiopia. Purposive sampling technique was employed to select the study sites, farms and animals. Physical examination, California Mastitis Test (CMT), Culture, Biochemical identification tests and Antimicrobial susceptibility tests were used in the study. A total of 384 lactating Holstein cross breed, jersey breed and zebu cows were included and of these, 216 (56.25%) were found to be reactive by CMT and only 21 cows (5.46%) were found clinically positive. A total of 33 (15.3%) isolates were identified via bacteriological analysis of the milk samples. The antimicrobial susceptibility test showed that the isolates were highly sensitive to Gentamycin (97.0%) and Amikacin (97.0%); moderately sensitive to Kanamycin (84.8%), Sulfamethoxazole (78.8%) and Tetracycline (66.7%). Whereas, highly resistant to Penicillin-G (100%). Statistically significant difference was observed (P< 0.05) between isolates and antibiotic used. This study depicted that antimicrobial resistant Staphylococcus aureus was prevalent in the study farms. Thus, improved management options should be practiced in order to minimize the economic loss caused by S. aureus mastitis in dairy farms.