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The objective of the study was to estimate the losses associated with subclinical mastitis (SCM) in crossbred dairy cows in the Central Highlands of Ethiopia. A split udder investigation was performed with 30 cows to determine production losses associated with SCM. Each quarter of the study cows was examined using the California Mastitis Test (CMT) and quarter milk production was measured over a period of 8 days. Production losses were determined for different CMT scores by comparing production of quarters with CMT score 0 to quarters with CMT scores trace, 1, 2 and 3, respectively. Using data from a recently published study, economic losses were determined for different farm sizes and production subsystems by multiplying the prevalence of the respective CMT scores with the production losses associated with these CMT scores. Mean quarter milk production was 0.82 +/- 0.40 kg per milking in the split udder trial. Milk production was reduced by 1.2%, 6.3%, and 33% in quarters with CMT scores 1+, 2+, and 3+, respectively. Using data from the published study, a quarter with SCM lost an average of 17.2% of its milk production. Production losses associated with SCM were estimated at 5.6% for the Addis Ababa Milk Shed. Stratified losses were highest (9.3%) in urban dairy farms (UDF) and small-scale farms (6.3%). The estimates of the financial losses ranged from US dollars 29.1 in dairy herds in secondary towns (DHIST) to US dollars 66.6 in UDF. A total loss of US dollars 38 was estimated for each cow per lactation. Reducing mastitis in UDF (highest prevalence) to the level of DHIST (lowest prevalence) could reduce the loss by US dollars 35. As this does not include costs associated with treatment or culling of diseased cows, this figure probably underestimates the possible benefits of control measures.