Storage fungi damage grains in several ways: they reduce germinability, produce undesirable odour and kernel discoloration, reduce the nutritional value and also produce mycotoxins injurious to the health of the consumers. A study was conducted to assess the prevalence of fungi associated with stored wheat grains under the storage conditions of farmers in Shashemene and Arsi Nagelle districts from June to July, 2013. Stratified random sampling technique was used to collect wheat grains from the study sites of Arsi Nagelle and Shashemene districts. Two peasant associations from each district and 10 House Holders from each of the peasant associations, with a total of 40 House Holders were purposively drawn for sample collection. A Malt Extract and Potato Dextrose Agar were used for the isolation of fungi. Fungi were identified based on the microscopic examination of spore morphology and culture characteristics of the isolates. A total of 898 fungal isolates belonging to five genera and three unidentified taxa were obtained. The isolated mycoflora were dominated by the morphotaxa of Aspergillus (45.54%) and Penicillium (29.18%), respectively. It was concluded that stored wheat from the study areas could be contaminated by storage fungi and therefore, awareness creation and training should be given to the farmers on better and improved storage techniques.