Little information is known about the influence of altitude on child growth in Ethiopia, where most people live in highlands. We investigated the relation of residential altitude with growth faltering (stunting) of infants and young children in Ethiopia. We also examined whether the altitude–growth relationship was independent of the influence of the dietary and non-dietary determinants of growth. We used the data of 26 976 under-5-year-old children included in the Ethiopian Demographic and Health Surveys, conducted from 2005 to 2016. The samples were recruited following a two-stage cluster sampling strategy. Stunting was defined by height-for-age <−2 z-scores. The relationship between residential altitude and stunting was examined by running multiple logistic regression analysis, controlling the effect of covariate dietary and non-dietary variables. The residential altitude of the study participants ranged from −116 to 4500 m above sea level (masl). There was a significant and progressive increase in the prevalence and odds of stunting with increasing altitude (P < 0·001), irrespective of the dietary and non-dietary predictors of stunting. The prevalence of stunting was lowest in lowlands (39 %) and highest in highlands (47 %). Compared with altitude <1000 masl, the odds of stunting was 1·41 times higher at altitude ≥2500 masl (OR 1·41, 95 % CI 1·16, 1·71) and 1·29 times higher at altitude 2000–2499 masl (OR 1·29, 95 % CI 1·11, 1·49). Children living in highlands might be at a higher risk of poor growth. Further studies are warranted to understand the mechanism behind the observed altitude–stunting link and identify strategies to compensate for the growth-faltering effect of living in highlands.