One of the great problems of Ethiopia for the educational arena is retention. Averagely 8.07% of each year of the secondary education students is repeated due to lack of achievement in this country. The percentage of retention in a country shows what proportion of students is regularly repeated in the same grade and who are, therefore, committing different crimes and misbehaved behaviors. Grade retention predicts many negative student outcomes: the frustration and humiliation associated with repeating the curriculum, combined with one's physical size, may result in an increase in aggression and oppositional behavior. The main purpose of this study was to investigate some of the causes that contribute to grade nine students' grade retention in general secondary schools of Dabat district. It has attempted to identify the major factors under two headings: in-school and out-of-school factors to present separate area of intervention. In order to attain the objectives, the study was carried out in two general secondary schools which were selected using comprehensive sampling techniques. The study involved 264 (M = 106 & F = 158) grade repeaters and 44 teachers and 2 principals. The data gathered were analyzed using percentage, mean, Spearmen rank order correlation coefficient and t-test. Based on the result of the analysis, among the in-school factors, the highest percentages were observed for difficulty of language of instruction, students' failure to study hard, poor quality of teaching, lack of guidance and counseling and frequent absenteeism of students were in-school related. On the other hand, low level of family income, parent (pupils) health problem, lack of parents support and child labor were identified as the major out-of-school causes for grade retention in grade nine secondary schools. It was also found out that the combined effect of both in-school and out-of-school factors was important in explaining students' grade retentions in the secondary schools of the district. The incidence of the problem is relatively higher among girls than among boys.