Background Patient safety has been identified as a global priority area. It is one of the most health care challenges. There is a rising number of patients’ mortality in hospitals each year because of lapses in patient safety practice. Therefore, the purpose of the present study was to assess knowledge, attitude, practice, and associated factors towards patient safety among nurses working at Asella Referral and Teaching Hospital. Methods Institution based cross-sectional study was conducted on 172 nurses working at Asella Referral and Teaching Hospital, Arsi Zone, Oromia Regional State, Ethiopia. The data were collected from nurses from December 28, 2020 to January 05, 2021 by using a pretested questionnaire. The data were entered into Epi-Data version 4.2.0.0 and analyzed using the SPSS version 23.0 software. Results A total of 172 nurses were enrolled in to the study, resulting a response rate of 99.4%. The mean age of the nurses was 32.53 years. More than half 94(54.7%) of them were female. The majority 133(77.3%) of them were qualified for degrees and above. The majority 155(90.1%) of them had working experience of ≤13years. The nurse’s level of good knowledge, positive attitude, and good practice towards patient safety was 58.7% (n = 101, [95% CI; 51.7, 66.7]), 52.9% (n = 91, [95% CI; 43.6, 61.4]), and 50% (n = 86, [95% CI; 43.6, 57%]) respectively. The multivariable logistic regression analysis showed; working in the operation theatre unit [AOR = 5.01, 95% CI; 1.36, 18.46], having information on patient safety during initial education [AOR = 4.99, 95%CI; 1.87, 13.31], and having information on patient safety during continuing education [AOR = 2.85, 95% CI; 1.14, 7.12] were factors significantly associated with knowledge towards patient safety. Being male [AOR = 3.09, 95% CI; 1.38, 6.95], having working experience of >13 years [AOR = 8.37, 95% CI; 1.36, 51.70], having information on patient safety during initial education [AOR = 3.36, 95%CI; 1.11, 10.15], having information on patient safety during continuing education [AOR = 3.33, 95% CI; 1.25, 8.85], and having good Knowledge towards patient safety [AOR = 2.74, 95% CI; 1.21, 6.21] were factors significantly associated with attitude towards patient safety. Having information on patient safety during initial education [AOR = 5.35, 95%CI; 1.77, 16.17] and having a positive attitude towards patient safety [AOR = 3.02, 95% CI; 1.32, 6.91] were factors significantly associated with practice towards patient safety. Conclusion In the present study, more than half of the nurse’s had good knowledge and positive attitude towards patient safety. However, only half of the nurses had good practice towards patient safety. Educational programs and training on patient safety may need to take place for nurses to abate these problems.