Voters are choosing between Prime Minister Meles Zenawi's Ethiopian People's Revolutionary Democratic Front (EPRDF), which has been in power for 14 years, and scores of smaller parties, including those in two main opposition coalitions.
In the capital, thousands lined up before dawn on Sunday at local polling stations that opened at 6am (0300 GMT), which in Ethiopia's system of timekeeping is midnight to the locals, and would close 12 hours later at 6pm (1500 GMT), or noon.
With massive early turnout at the more than 30,000 polling stations around the country where 26 million people are registered to cast ballots, officials said voting could finish well ahead of schedule.
Meles, who has been in power for 14 years and is seeking a third five-year term, believes the election will be a showcase for Ethiopia's burgeoning democracy and an affirmation of his West-leaning centre-left administration.
Yet, less than 12 hours before the polls opened, the opposition Coalition for Unity and Democracy (CUD) and United Ethiopian Democratic Forces (UEDF) accused the government of arresting hundreds of their election observers.
Land ownership, food security, taxes and unemployment were the main bones of contention in the ethnically diverse republic, although analysts say there is little real distinction between the rivals.