Migration has been a phenomenon of all periods of history and of all continents. It is becoming one of the global phenomena in the 21st century (IOM, 2004). By country of migration and gender, reports on Ethiopian migrants in the Middle East indicate, 68 percent of them are females (IOM, 2010). From Ethiopia, the number of women domestic workers migrating to the Middle East countries (which includes Bahrain, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, and United Arab Emirates) is growing (Metz, 1993). Primarily, the influx of women to the Middle East has become a growing social problem in Ethiopia. Like most of Ethiopian women who leave for work, the migrant women are driven by the motives for earning a living as domestic workers. The women face enormous challenges during the process of their travel, as foreign housemaids and upon returning home. Besides, currently, shocking news has been covered both by national and international medias about forced returnees from Saudi Arabia in particular. The general objective of the study is to investigate the magnitude of psychosocial problems encountered by the female migrant returnees, to identify their coping strategies, and their need for psychosocial rehabilitation. Specifically, it is intended to Investigate psychological and social problems that female migrant returnees had encountered and coping strategies that female migrant returnees had employed. The researchers used a mixed-methods approach, quantitative and qualitative approach. The method of triangulation was used to collect the quantitative and qualitative data which lead to well validated and substantial findings. The study indicated that the majority of the respondents were legal migrants; only some of them had made illegal journey to the Arab countries. In the process of migration (facilitated by agency workers and brokers), the respondents had faced challenges, that is, they experienced physical attack, psychological humiliation and verbal harassment. The study also indicated that some of the returnee migrants managed to cope with the life difficulty they had faced. Based on this study several recommendations have been made.