Background <p>Wheat is one of the top priority crops of the Ethiopian government for ensuring food security and generating income. However, the average wheat productivity per unit area remains low compared to international records. Seed insecurity is a major contributing factor to this problem. Therefore, this study was initiated to identify factors affecting farmers’ choice among the available wheat seed supply sources.</p> Methods <p>A total of 203 sample households were selected from four kebeles using a multistage sampling technique. Data were collected using a structured questionnaire and a checklist through interviews with sample households, key informants, and focus group discussions. Descriptive statistics, inferential statistics, and the bivariate probit model were employed to analyze the data.</p> Results <p>The results of the bivariate probit model indicate that education level, social position, credit use, and extension contact significantly and positively affect households’ use of improved wheat seeds. While factors such as seed quantity shortage, low quality, and late access negatively and significantly affect their use.</p> Conclusion <p>To address the constraints faced by smallholder farmers in access of improved wheat seed, policy amendments of seed development and supply system are needed by focusing on strengthen of agricultural research institutions, agricultural extension personnel at regional, zonal, and woreda levels and to resolve system limitations, particularly seed quantity shortages, low quality, late delivery, and lack of information.</p>