Background Poor job conditions and limited resources are reducing job satisfaction and motivation among nurses in low-income countries, which may affect the quality of services and attrition rates. The objective of this study was to examine job satisfaction, motivation and associated factors among nurses working in the public health facilities of Ethiopia, with the aim of improving performance and productivity in the health care system. Methods The study employed a cross-sectional two-stage cluster sampling design. From a random sample of 125 health facilities, 424 nurses were randomly selected for face-to-face interviews in all regions of Ethiopia. Nurses responded to questions about their overall job satisfaction and job conditions, including items related to intrinsic and extrinsic motivation, using a 5-point Likert scale. Multilevel analysis was performed to adjust for different clustering effects. Satisfaction levels (percent of respondents who were satisfied) were calculated for individual items, and composite mean scores (range: 1–5) were calculated for motivational factors. Adjusted odds ratios were computed to examine the association of these factors with overall job satisfaction. Results Overall, 60.8% of nurses expressed satisfaction with their job. Composite mean scores for intrinsic and extrinsic motivational factors were 3.5 and 3.0, respectively. Job satisfaction levels were significantly higher for female nurses (65.6%, p = 0.04), those older than 29 years (67.8%, p = 0.048) and had over 10 years work experiences (68.8%, p = 0.007). Satisfaction with remuneration (AOR = 2.04, 95% CI = 1.36, 3.06), recognition (AOR = 2.21; 95% CI = 1.38, 3.53), professional advancement (AOR = 1.54; 95% CI = 1.06, 2.29), features of the work itself (AOR = 1.65; 95% CI = 1.20, 2.91) and nurses’ work experiences from 5 to 10 years (AOR = 0.37, 95% CI = 0.17, 0.79) were significantly associated with overall job satisfaction after controlling for other predictors. Conclusions The study findings are signals for the Ministry of Health to strengthen the human resource management system and practices to improve nurses’ overall job satisfaction and motivation, especially among nurses with 5 to 10 years of experience on the job. Expanded recognition systems and opportunities for advancement are required to increase nurses’ job satisfaction and motivation. Equitable salary and fringe benefits are also needed to reduce their dissatisfaction with the job.