Background Campylobacteriosis, is a zoonotic bacterial disease observed with a rising worldwide. It is becoming the most commonly recognized cause of bacterial gastroenteritis in under-five mortality in recent years. This study was done to determine the prevalence and determinants of Campylobacter infection among under-fives with acute watery diarrhea. Methods This institutional-based cross-sectional study was conducted at governmental and private health institutions in Hawassa city. All outpatient under-five children who met the inclusion criteria from April 2021 to August 2021 were enrolled in this study. Demographic and clinical data were obtained using a standardized data collection tool. Stool samples were collected from each participant with a sterile container and inoculated on a campylobacter agar media. The isolates were identified by using biochemical tests and a disc diffusion technique was performed to determine the antimicrobial sensitivity patterns of the isolates. Data were entered and analyzed using SPSS version 21. Descriptive and Logistic regression analysis was applied to determine the determinants of Campylobacter infection. P-value < 0.05 was considered statistically significant. Results A total of 235 under-five children were enrolled in this study with a 100% response rate. Of these 130 (55.3%) and 105(44.7%) were males and females respectively with the age range of 2 months to 60 months with the mean age of 25 months. The majority of the 150 (63.2%) were rural residents. Of 235 under-fives with acute watery diarrhea, 16 (6.8%) patients were found to have Campylobacter infection with (95% CI, 3.8–10.2%). Consumption of pasteurized milk (AOR: 0.12; 95% CI 0.02–0.75, P<0.05), presence of domestic animals like cats, hens, and cows (AOR: 0.09: 95% CI 0.01–0.67, P<0.05), absence of handwashing practice before food preparation (AOR: 3.63, 95% CI 1.15–11.46, P<0.05) showed significant association with campylobacter infection. The antimicrobial susceptibility patterns of the isolated bacteria were 100% sensitivity to Azithromycin, Chloramphenicol, and Gentamicin, however; it was 100% resistant to Cephalothin. The associations of socio-demographic, environmental, and behavioral factors were compared and consumption of unpasteurized milk, the presence of domestic animal like the cat was significantly associated. Conclusion Campylobacter infection showed a comparatively low prevalence in under-fives with acute watery diarrhea. In this study contact with cats, consumption of unpasteurized milk were associated with Campylobacter infection. The treatment approach of Campylobacter infection must consider the sensitivity profile of antibiotics as indicated in the study. We, therefore, recommend further studies to determine the species responsible for Campylobacter infection with other co-morbidities and the susceptibility pattern for each species to indicate appropriate antibiotic therapy.