The attack occurred around 8 pm (1700GMT) at a crowded hotel bar in the town of Gondar in the Amhara regional state, the state Ethiopian News Agency reported, quoting the city’s police Public Relations Inspector Marelegn Wondim.
Police are investigating the matter and seeking the perpetrators, he said.
The attack occurred in one of the focal points of the many incidences of anti-government protests that raged in two of the largest regional states, Oromia and Amhara, since 2014.
Last October, the government declared a three-month state of emergency and managed to quell the protests.
In a press conference on Monday, Ethiopian Prime Minister Hailemariam Desalegn said the state of emergency will remain until the gains made so far have been “consolidated”.
"As far as the date of lifting the state of emergency is concerned, it should be seen in the perspective that we have to consolidate the gains that we have made so far," he said.
It is not clear whether the grenade attack yesterday was a sign of a continuing protest.