Background To assess and compare the prevalence, severity and prognosis of anti-TB drug induced hepatotoxicity (DIH) in HIV positive and HIV negative tuberculosis (TB) patients in Ethiopia. Methodology/Principal Findings In this study, 103 HIV positive and 94 HIV negative TB patients were enrolled. All patients were evaluated for different risk factors and monitored biochemically and clinically for development of DIH. Sub-clinical hepatotoxicity was observed in 17.3% of the patients and 8 out of the 197 (4.1%) developed clinical hepatotoxicity. Seven of the 8 were HIV positive and 2 were positive for HBsAg. Conclusions/Significance Sub-clinical hepatotoxicity was significantly associated with HIV co-infection (p = 0.002), concomitant drug intake (p = 0.008), and decrease in CD4 count (p = 0.001). Stepwise restarting of anti TB treatment was also successful in almost all the patients who developed clinical DIH. We therefore conclude that anti-TB DIH is a major problem in HIV-associated TB with a decline in immune status and that there is a need for a regular biochemical and clinical follow up for those patients who are at risk.