BackgroundThe risk of death from complications relating to pregnancy and childbirth over the course of a woman’s lifetime is higher in the developing countries. Improving the health of mothers and children through well-organized institutional delivery service is central to achieve reduced maternal and child morbidity and mortality. So, factors that underlie the level of institutional delivery service utilization need to be investigated, especially in areas where little is known about the problem. Therefore, the objective of this study was to assess factors influencing institutional delivery service utilization in Dembecha district, Northwest Ethiopia.MethodsCommunity based quantitative cross-sectional study was conducted from March 1 to 30, 2015 among 674 mothers who gave birth within the last two years preceding the study using interviewer administered questionnaire. Multi-stage sampling with stratification sampling technique was used. Descriptive statistics were done to characterize the study population using different variables. Bivariate and multivariable logistic regression models were fitted to determine association. Odds ratios with 95% confidence intervals were computed. Statistical significance was declared at p-value <0.05.ResultsOf all 674 respondents, 229(34%, 95% CI: 29.8%–37.9%) of them utilized health institutions for their last delivery. History of still birth (AOR (adjusted odds ratio) =0.25, 95% CI (confidence interval) =0.07–0.77), number of ANC visit (AOR = 38.51, 95% CI = 22.35–66.33), functional media (AOR = 2.61, 95% CI = 1.59–4.28) and distance to nearby health facility (AOR = 0.52, 95% CI = 0.32–0.83) were found to be significantly associated with institutional delivery service utilization.ConclusionIn this research the level of institutional delivery service utilization is still low compared to government initiatives. History of still birth, low number of ANC visit, unavailability of functional media and existence of distant health facilities were found to be significantly associated with low utilization of the service. So, concerned bodies should contribute their share to improve institutional delivery service utilization in the study area by tackling modifiable risk factors.