Internal displacement was recognized during the late 1980s and became prominent on the international agenda in the 1990s. There are 2421 internally displaced people who were displaced from the Somali Regional State due to the interethnic conflict that occurred between the Oromo and Somali ethnic groups living around the borders in the eastern part of Ethiopia and settled in Adama city and Sabata town. The objective of this paper is to determine the social consequences of conflict-induced internal displacement on internally displaced people and host communities. Data collection methods were quantitative and qualitative data collection methods. The quantitative data collection method was survey questionnaires administered to 384 household heads. The qualitative data collection methods were key informant interviews, focus group discussion, and observation. The data were analyzed using logistic regression and linear multiple regression. The consequences of conflict-induced internal displacement on house rent, healthcare service costs, educational fees, student dropout, and student enrollment are analyzed using linear multiple regression. On the other hand, the consequence of conflict-induced internal displacement on social disintegration is analyzed using logistic regression. Internal displacement significantly affects the price of house rent (B = 0.262, p< 0.01), affects healthcare service costs (B = 0.262, p< 0.01), and is significantly related to social disintegration at p< 0.01. Internal displacement and student enrollment significantly affect educational fees (B = 0.233, p< .0.01, and 0.785, p< 0.01, respectively) and internal displacement, student enrollment, and educational fees significantly affected student dropout (B = 0.107, p <0.01, B = 0.853, p < 0.01, and B = 0.096, p< 0.01, respectively). The findings show that conflict-induced internal displacement severely disrupts the social fabric of communities and makes the task of rebuilding lives and reintegrating more challenging after displacement. The findings also revealed that internally displaced people have no access to social services such as health, education, and potable water, are living in congested and overcrowded camp settings, are affected by discrimination and marginalization from the host community, and are affected by psychological trauma. The social consequences of conflict-induced internal displacement on internally displaced people are homelessness, social disintegration, poor health, loss of education, and psychological trauma. On the other hand, the social consequences of conflict-induced internal displacement on host communities are changing gender roles and age-related responsibilities and expectations complementing changes in the structure and function of social networks, the agency of displaced people, their social empowerment and new forms of leadership, and power structures in the host population. To ameliorate the social consequences of conflict-induced internal displacement, the study recommended increasing internally displaced people's engagement and representation in community-based organizations and supporting them in better participating in authorities to address internally displaced peoples' concerns.