Entomological studies to determine the effect of the physical characteristics of mosquito larval breeding water bodies and reservoir water level changes on the occurrence of <i>Anopheles</i> mosquito larvae were conducted in two villages at Koka reservoir in central Ethiopia between August and December 2007. Of the two study villages, Ejersa is located close to the reservoir, and Kuma is 5 km away from it. Data on the type, number and physical characteristics of <i>Anopheles</i> larval breeding habitat, species composition and densities of anopheles mosquitoes in and around the study villages were investigated and recorded. Meteorological and reservoir water level data were compared with availability of <i>Anopheles</i> larval breeding sites and densities. Entomological data, derived from weekly larval collections, showed that <i>Anopheles pharoensis</i> Theobald, <i>Anopheles gambiae</i> s.l. Giles, <i>Anopheles coustani</i> Laveran and <i>Anopheles squamosus</i> Theobald were breeding in the study area. The mean larval density of <i>An. gambiae</i> s.l. in this study was higher in slightly turbid and shallow aquatic habitat than in turbid and relatively deep aquatic habitat. The density of <i>An. pharoensis</i> in habitat with floating vegetation and with relatively shady conditions was significantly higher than that of less shaded aquatic habitat and greater emergent vegetation. There was also a positive correlation between the occurrence of <i>Anopheles</i> larvae with the water and daily minimum atmospheric temperature. Similarly at Ejersa, over the sampling period, there was a positive correlation between falling reservoir water levels and the number of positive breeding habitats. These results confirm that physical characteristics of the water bodies play an important role in the species composition, total <i>Anopheles</i> larval count, and the density of <i>Anopheles</i> mosquitoes. Suitable breeding habitat in the vicinity of the reservoir village was strongly associated with the reservoir. This is particularly important for <i>An. pharoensis</i> and <i>An. gambiae</i> s.l. which are important vectors of malaria in the area.