Objective: Providing postnatal care services at right time could help to reduce maternal and newborn deaths. Thus, this study aimed to assess the factors influencing the utilization of early postnatal care services among postpartum women in Yirgalem town, Sidama Regional State, Ethiopia. Methods: A community-based cross-sectional study was done using structured and interviewer-administered questionnaires among randomly selected 306 postpartum women. Data were cleaned, coded, and entered into EpiData-3.1, and exported to Statistical Package for Social Science-21 for analysis. Descriptive statistics, bivariable, and multivariable logistic regression analysis were done. A p-value ⩽ 0.05 was used to consider statistically significant variables. Results: Generally, 202 (66.7%) visited a health facility for postpartum care. The prevalence of early postnatal care service utilization was 45.5% (95% confidence interval = 39.9–50.5). Mainly practiced services were physical examination (37%) and family planning (31%) services. Having formal education (adjusted odds ratio = 3.6; 95% confidence interval = 1.7–7.4), having antenatal care (adjusted odds ratio = 3.5; 95% confidence interval = 1.6–7.6), institutional delivery (adjusted odds ratio = 2.3; 95% confidence interval = 1.2–4.7), and getting advice from healthcare provider (adjusted odds ratio = 18.69; 95% confidence interval = 9.19–37.99) were factors significantly associated with early postnatal care service utilization. Conclusion: The practice of early postnatal care needs more attention in the study area. Improving the educational status of the women, strengthening healthcare providers’ counseling on the benefits of postnatal care, and inspiring pregnant women to use antenatal care and institutional delivery services will improve the use of postnatal care services on time.