Based on figures from the Central Statistical Agency in 2005, this town has an estimated total population of 159,009 of whom 80,897 were males and 78,112 were females. According to the 1994 national census, it had a population of 88,867 people. The 1994 census reported this town had a total population of 88,867 of whom 43,874 were males and 44,993 were females. Herbert S. Lewis states that in the early 1960s it was "the greatest market in all of southwestern Ethiopia. On a good day in the dry season it attracts up to thirty thousand people.
The present town was developed on the Awetu River by Italian colonialists in the 1930s. At that time, with the goal of weakening the native Ethiopian Church, the Italians intended to make Jimma an important center of Islamic learning, and founded an academy to teach fiqh.
Jimma was the scene of a violent encounter which started in April 1975 between radical college students (known as zemacha) sent to organize local peasants, who had benefitted from land reform, and local police, who had sided with local landowners. Students and peasant followers had imprisoned local small landowners, rich peasants and members of the local police force; this action led to further unrest, causing the Derg (the ruling junta) to send a special delegation to Jimma, which sided with the local police. In the end, 24 students were killed, more arrested, and the local zemacha camps closed. Days before the end of the Ethiopian Civil War in May 1991, the city was captured by the Ethiopian People's Revolutionary Democratic Front.
On 13 December 2006, the Ethiopian government announced that it had secured a loan of US$ 98 million from the African Development Bank to pave the 227 kilometers of highway between Jimma and Mizan Teferi to the southwest. The loan would cover 64% of the 1270.97 million Birr budgetted for this project.