Banana fruits are highly perishable and affected by different microbial contaminates because ripe bananas are very perishable. One of the most important factors causing great economical loss of banana fruits is postharvest fungal diseases caused by lack of proper handling along postharvest chains. In line with this, the study was carried out to assess banana fruits handling practices and identify the major causal agents of postharvest fungal disease of banana fruits in Jimma town of bishishe market. Assessment was carried out using purposive sampling to select the study area, followed by simple random sampling to collect information on handling practices through observation and interview using pretested questioners. The survey result revealed that losses of banana fruits due to spoilage and physical injury were common problems for all fruit vendors. Practices such as lack of sanitation, temperature management, and improper packaging and transportation problems were identified among the common causes for observed losses. A total of 48 fruits were purposively selected from open market, wholesales and retailers and fruit damage, disease incidence, disease severity and identification of diseases causing fungal pathogen were conducted under laboratory. The highest fruit damage (56.2%) was recorded in sample taken from retailers’ shop, and the associated disease incidence and severity were 54.2% and 34%, respectively. Morphological identification of pure culture revealed that anthracnose caused by Colletotrichum musae and crown rot caused by fusarium spp. are the most important disease causing agents and result in large percentage of fruit loss in Jimma town of bishishe market.