Problematic smartphone use (PSU) has emerged as a growing public health concern among youth globally, yet multi-city data from low-income settings remain scarce. This study aimed to determine the prevalence and correlates of PSU among Ethiopian youth across seven major urban centers. A multi-center cross-sectional study was conducted among 1,785 youth (aged 15–24 years) in Addis Ababa, Hawassa, Bahir Dar, Dire Dawa, Harar, Jijiga, and Adama. PSU was assessed using the Smartphone Application-Based Addiction Scale (SABAS). Data on socio-demographic, behavioral, psychological (depression, anxiety, sleep quality, self-esteem), and substance use factors were collected. Multivariate linear regression identified independent predictors of PSU. The overall PSU prevalence was 44.8%, with a mean SABAS score of 17.6 ± 4.1. Significant geographic variation was observed (F = 18.42, p < 0.001), ranging from 52.9% in Addis Ababa to 38.4% in Harar. Independent predictors of higher PSU included: daily smartphone use >4 hours (β = 5.87), non-educational use (β = 3.78), Addis Ababa residence (β = 3.45), depression (β = 3.44), bedtime smartphone use (β = 3.11), anxiety (β = 2.89), poor sleep quality (β = 2.78), first-year student status (β = 2.34), khat chewing (β = 2.01), female sex (β = 1.67), and alcohol use (β = 1.67). The model explained 42.3% of the variance in PSU scores. PSU affects nearly half of Ethiopian youth, with significant geographic variation and strong associations with mental health, behavioral patterns, and substance use. Targeted interventions addressing high-risk groups—particularly females, first-year students, and those with depression or poor sleep—are urgently needed. Longitudinal research is essential to establish causal pathways and inform effective prevention strategies.