Background: Data regarding prolonged length of hospital stay (PLOS) and in-hospital mortality are paramount to evaluate efficiency and quality of surgical care as well as for rational resource utilization, allocation, and administration. Thus, PLOS and in-hospital mortality have been used as a surrogate indicator of satisfactory treatment outcome and efficient utilization of resources for a given health institution. However, there was a scarcity of data regarding these issues in Ethiopia. Therefore, this study aimed to assess treatment outcome, length of hospital stay, in-hospital mortality, and their determinants. Methods: Health facility-based prospective observational study was used for three consecutive months among adult patients hospitalized for the surgical case. Socio-demographic, clinical history, medication history, in-hospital complications, and overall treatment outcomes were collected from the medical charts' of the patients, using a checklist from the day of admission to discharge. PLOS is defined as hospital stay > 75th percentile (≥33 days for the current study). To identify predictor variables for both PLOS and in-hospital mortality, multivariate logistic regression was performed at p-value < 0.05 using SPSS version 20. Written informed consent was sought and secured. Results: Of 269 study participants, 91.8% were improved and discharged. PLOS was recorded in 25.3%; at least 33 days of hospital stay. Overall in-hospital mortality was 4.8%; which is equal to an incidence rate of 0.00193 per person-days, 5.2% in-hospital sepsis, and 2.6% of Hospital-acquired pneumonia (HAP), during their hospital stay. After adjusting for other factors; female gender (p = 0.003), emergency admission (p = 0.015), presence of Poly-pharmacy (p = 0.017), and presence of sepsis (p = 0.006) were found to be independent predictors for in-hospital mortality. On top of this, female gender (p = 0.026), patients who was paid by government (p = 0.007), burn-related surgery (p = 0.049), presence of cancer (p = 0.027), > 2 antibiotic exposure (p < 0.0001), and waiting for surgery for > 7 days (p < 0.0001) were independent predictors for PLOS.