We show that the country’s rural–urban linkages remain weak due to the low degree of urbanization, exclusive promotion of urban or rural-based developments by various Ethiopian governments at one time or another (at the expense of the other), insufficient trade links between towns and the countryside, lack of tenure security, and the continued buffeting of the national economy by changes in the natural climate and the global economic climate. And yet, migration-driven rural–urban linkages as well as nascent functional and structural integration of urban and rural Ethiopia are facilitating socioeconomic growth by providing an exit out of poverty and thereby significantly and positively impacting people’s well-being and livelihoods. Our analyses show that urban–rural linkages in Ethiopia insure the survival and development of both urban centers and rural livelihoods. They also show that sustainable rural development is impossible without sustainable urban growth. The urban service sector’s role (especially the informal sector), has been increasing steadily. By absorbing migrant laborers and supplying needed products relied upon by rural compatriots the informal sector in urban Ethiopia is providing the most jobs. It is also generating a significant proportion of urban incomes while providing the foundation upon which the rural–urban linkage is built.