Background: Severe Mental Health Conditions (SMHCs) affect multiple generations although this is poorly studied. The aim of this study was to investigate the intergenerational and multidimensional impacts of SMD in rural Ethiopia. Methods: This comparative study was nested within an existing population-based cohort study. We collected data from a total of 5762 family members of 532 households (266 households with at least one family member with SMHCs and 266 sex and age-matched mentally well controls from the neighborhood) in 2019. The main outcomes were multidimensional poverty, mortality, food insecurity, and family satisfaction. Findings: Multidimensional poverty Index was higher in the households of persons with SMHCs (74.44%) than in the comparison households (38.35%). School attendance was lower in children of people with SMHCs (63.28%) than in children of the comparisons (78.08%). The median years of schooling were also lower among children of people with SMHCs than the controls. This lower attendance was also true among siblings of people with SMD (35.52%) than the comparisons (49.33%). Over the course of 20 years, family members who have a person with SMHCs in their household had a 23% increased risk of death compared to family members who did not have a person with SMHCs in their household. Severe food insecurity was also higher in the SMHCs households (20.68%) than in the comparison (13.53%) while family satisfaction was lower. Interpretation: Families of people with SMHCs experience pervasive multidimensional and intergenerational impacts. Interventions should consider the broader family social and healthcare needs of the broader family.