Fertility levels in most urban areas of Ethiopia have declined substantially in the face of low levels of socioeconomic development. In contrast, rural fertility remains at high levels. Employing a combination of quantitative and qualitative research approaches, this study examines people’s orientations toward reproduction, including the perceived benefits and associated costs of childbearing, and their attitudes concerning the changing reproductive behavior in urban areas. It also examines the extent to which demographic, proximate, and sociocultural factors can account for the urban-rural differences in fertility. Qualitative data were obtained through in-depth interviews and focus group discussions. It was observed that urban residents have reproductive goals that take into account costs and risks in the face of economic hardships, and a desire to achieve upward social mobility. Parents place emphasis on the well-being of a relatively smaller number of children and on attaining a certain level of investment in their own human capital, which is incompatible with large family size preferences. In addition, the findings suggest that induced abortion might have some role in regulating fertility in urban areas. Data for the quantitative analysis came from the first Ethiopia Demographic and Health Survey (ETDHS). Life-table techniques were used to estimate the median ages at different parities and median durations between successive births, in urban and rural areas. A series of parametric hazard models were estimated to examine the effects of theoretically relevant demographic, proximate, and socio-cultural covariates on the timing of births. Across all transitions, women who experienced child loss had faster transitions and, therefore, higher likelihood of subsequent births. Other covariates, such as union status, religion, and contraceptive use, were also observed to have significant effect on the timing of births and to play a larger role in urban areas. A major implication from these findings is that improving child survivor ship is an important moderating factor in high fertility conditions, particularly in rural areas. The results also indicate that future studies are needed to conduct separate analyses of marital and non marital fertility and examine the extent of induced abortion in urban areas.