Secret Service agents arrested the man on Monday after shots were fired in the air in the embassy's outside compound in the US capital.
Video shown by Ethiopian television ESAT showed a man brandishing and firing a handgun as a small crowd of protesters took down the Ethiopian national flag.
State Department spokeswoman Jen Psaki said yesterday her bureau had requested that Addis Ababa lift the man's diplomatic immunity "to permit prosecution of the individual involved in that incident."
Psaki gave no further details about the shooting or the person involved.