Background Devastatingly, the number of children with SAM is still growing globally. Severe acute malnutrition is the third most common contributing factor to the deaths of under-5 children worldwide. According to the World Health Organization, severe acute malnutrition causes 1 million deaths annually via increased susceptibility to death from severe infection. Ethiopia is one of the countries with highest under-5 child mortality rate, with malnutrition underlying to 28% of all children deaths. In Ethiopia, some studies reported an alarming death and default rates which indicate the need for further study to assess contributing factors to the treatment outcomes of severe acute malnutrition. Therefore, the intention of this research is to determine the treatment outcomes of severe acute malnutrition and identify predictors of nutritional recovery. Method: A retrospective cohort study was conducted among 423 under-5 children with severe acute malnutrition. Logistic regression analysis was performed and an adjusted odd ratio with 95%CI was used to determine independent predictors. Result The overall recovery, death and default rates were 81.3%, 11.1% and 7.6% respectively. Age, vaccination status, HIV/AIDS, pneumonia, diarrhea and stunting were found to be significant independent predictors of treatment outcomes. The adjusted odd ratio (AOR) for nutritional recovery increased by 14.6% for every 1-month increase in child age (AOR = 1.146; 95%CI: 1.052–1.249). Regarding vaccination status, those under-5 children who were fully vaccinated for their age were about 4 time more likely to recover than their counterparts (AOR = 4.242; 95%CI: 1.566–11.491) Conclusion In conclusion, the overall nutritional recovery and default rate in this study were in the acceptable range of international standard even though the death rate was higher. Age and full vaccination were proven to increase nutritional recovery. Conversely, the presence of HIV/AIDS, pneumonia, diarrhea and stunting were proven to decrease nutritional recovery.