Dire Dawa city is identified as one of the most flood-affected cities in Ethiopia. Classifying village-level flood vulnerability using flood indicators is a new approach to Dire Dawa city. Analysis of different flood vulnerability factors underpins sustainable flood risk management and the application of Flood Vulnerability Index (FVI) approach is the hub of this study. Relevant data were collected from 110 households sampled from purposely selected 10 villages found in Dire Dawa city. The flood vulnerability index was used to compare, classify and rank villages in terms of their flood vulnerability levels. For this purpose, 24 sets of indicators which are strongly affecting the levels of flood vulnerability were assessed from social, economic and physical perspectives. The FVI of each village was computed with unequal method of weighting indicators. The findings of the study revealed that Dire Dawa city villages were experiencing varying levels of flood vulnerability. Accordingly, villages 05, 06, 07 and 09 were identified with high flood vulnerability level while villages 03, 04 and 08 and villages 01, 02 and extension village were identified with medium and low level of vulnerability, respectively. Interestingly, the findings of the study confirmed that social factors contributed much for flood vulnerability in Dire Dawa city. Hence, future urban flood risk planning and management endeavors in the city of Dire Dawa must be underpinned by proper utilization of the flood vulnerability map developed addressing social vulnerability component through both structural and non-structural urban flood risk management measures.