Introduction: Childbirth in a health institution has been shown to be associated with lower rates of maternal and neonatal mortality. However, about 85% of mothers in Ethiopia deliver at home.

Objective: To assess factors associated with institutional delivery service utilization among women who gave birth within one year prior to the study in Dangila district.

Methods: A cross-sectional study was conducted from February 01-28, 2015. A total of 763 mothers were interviewed using structured questionnaire. SPSS version 20 was used for analysis. Crude and adjusted Odds ratios were computed for selected variables. A P-value less than 0.05 was considered statistical significant.

Results: Only 18.3% of mothers gave birth at health facilities. Knowledge on danger signs [AOR=2.0, 95% CI: (1.1, 3.4)], plan to give birth at health institution [AOR=5.4, 95% CI: (3.0, 9.6)], having ANC follow up during pregnancy [AOR=12.9, 95% CI: (5.0, 33.3)] and time taken to get to a nearby health institution [AOR=5.1, 95% CI: (2.9, 9.1)] were associated with institutional delivery service utilization.

Conclusion: Institutional delivery was very low. Knowledge about danger signs, having ANC visits, and time were factors associated with institutional delivery service utilization. Thus,the findings recommend repeated re-enforcement of institutional delivery service utilization through professionals. And also, the findings recommend promotion of institutional delivery service utilization through mass media.