This study tries to examine the determinants of the choice of fuel wood sources in rural Ethiopia. Survey data collected from a sample of rural households in the East Gojam and South Wollo zones of the Amhara region of the country were used for the analysis. A multinomial probit model that allows correlation between the residuals has been employed to address the question of whether household’s socioeconomic, environment and institutional variables affect the choice of fuel wood source in rural Ethiopia. The result of the analysis shows that household characteristics such as age and education level of the household head are important determinants in the choice of fuel wood sources. The surprising result from this study is that local level institutions, tenure insecurity and possession of land certificate are all found to be insignificant. Finally, our findings suggests that there are some kind of substitution possibilities between fuel wood from forest and other sources (private and market) as indicated by the positive and significant impact of distance to the forest on the probability of fuel wood collection from private or market sources.