Purpose Self-medication is the use of medicines by individuals to treat self-recognized illnesses or symptoms without any medical supervision. Such practices may cause antimicrobial resistance, which causes treatment failure, economic loss, serious health hazards, missed diagnosis, delayed appropriate treatment, drug dependency, and adverse drug effects. However, empirical evidence is limited to the current status of its practices and associated factors among university students. Thus, the aim of this study was to assess the magnitude and associated factors of self-medication practices among medicine and health science students at the University of Gondar. Methods An institution-based cross-sectional study was employed from February to March 2017. A total of 792 randomly selected students were surveyed with a self-administered structured questionnaire. Epi Info version 7 and SPSS version 20 were used for data entry and analysis, respectively. Binary logistic regression analysis was performed. In multivariable analysis, P-value <0.05 and adjusted odds ratio (AOR) with 95% confidence interval (CI) were used to identify associated factors. Results Self-medication practice was found to be 52.4% (95% CI: (49%, 56%)) among university students. For most students, the major reason for using self-medication was taking the illness as less serious (71.1%). Females (AOR: 1.48; 95% CI: 1.08–2.01), income category (USD 44.01–175.87) (AOR: 0.47; 95% CI: 0.29–0.78), sixth year students (AOR: 8.71; 95% CI: 4.04–18.77) and health officer students (AOR: 2.36; 95% CI: 1.20–4.63) were found to be significantly associated with self-medication practice. Conclusion More than half of the students practiced self-medication, which is moderately higher than other findings. Gender, income, year of study, and field of study were the major factors that affected self-medication. Therefore, interventions that can halt the high magnitude of self-medication and factors associated with it are crucial. Special attention should be given to students who stay in the university for longer years.