Wheat stem rust, caused by Puccinia graminis f. sp. tritici, is the major biotic constraints for wheat production in the world and in the Eastern part of Africa particularly Ethiopia and Kenya.the objective of this paper is to review wheat stem rust and new races in Ethiopia as well as to review wheat stem rust recurrent epidemics and challenges. Yield loss of stem rust reaches 100% in conducive environment and susceptible varieties during year of epidemics. Countries such as Kenya and Ethiopia experience recurrent epidemics of stem rust due to evolution of new stem rust races. Wheat stem rust was not problem for the last three decades, but after the emergence of Ug99 in Uganda, the new race of stem rust Ug99 was subsequently shown to attack the stem rust resistance genes Sr31 and Sr38, which were previously effective resistance genes. Since that it affects east and North Africa and Middle East. Currently about 13 Ug99 lineage are recorded in thirteen countries. Ethiopia experience recurrent epidemics of stem rust due to migration and evolution of new stem rust races. In Ethiopia popular bread wheat varieties such as Enkoy (1994) and Digalu (2013-2015) were wiped out by stem rust with a yield loss of 58 and 100% respectively. Similarly variety Dashen, Kubsa and Galama was also devastated by yellow rust in 1988 and 2010. Variety Digalu was devastated by non Ug99 race which is known as TKTTF named Digalu race. Currently about 11 new races are recorded in Ethiopia (TTKSK, TTKTF, TTKTK, JRCQC, TKTTF, TTKSC, TRTTF, SRKSC RRKSF, TTTH, HKPPF and HKNTF). The reason why the recurrent epidemics and causes of virulent races occur in Ethiopia could be most likely due to ecological location and climatic conditions of the country as well as continuous cultivation of wheat during the year providing green bridge for survival of inoculum. The environmental condition prevailing in highlands of eastern Africa facilitates populations of stem rust to persist throughout the year and these conditions provide support to the evolution of new physiological strains. Currently there is no resistant wheat varieties known in Ethiopia to stem rust. Late and extended planting of wheat in vertisol area, use of widely adapted varieties in mega environment, absence of timely action or weak periodic assessments, monitoring, forecasting and absence of early warning of wheat stem rust are the reason for epidemics. Continues developing and supply of resistant varieties and incorporating diverse resistance genes and adult plant resistance genes into high-yielding, adapted varieties as well as working strongly with international organization to manage rust is advisable.