Background Globally, obstructed labour accounted for 22% of maternal morbidities and up to 70% of perinatal deaths. It is one of the most common preventable causes of maternal and perinatal mortality in low-income countries. However, there are limited studies on the determinants of obstructed labor in Ethiopia. Therefore, this study was conducted to assess determinants and outcomes of obstructed labor among women who gave birth in Hawassa University Hospital, Ethiopia. Methods A hospital-based case-control study design was conducted in Hawassa University Hospital among 468 women. All women who were diagnosed with obstructed labour and two consecutive controls giving birth on the same day were enrolled in this study. A pretested data extraction tool was used for data collection from the patient charts. Multivariable logistic regression was employed to identify determinants of obstructed labor. Results A total of 156 cases and 312 controls were included with an overall response rate of 96.3%. Women who were primipara [AOR 0.19; 95% CI 0.07, 0.52] and multigravida [AOR 0.17; 95% CI 0.07, 0.41] had lower odds of obstructed labour. While contracted pelvis [AOR 3.98; 95% CI 1.68, 9.42], no partograph utilization [AOR 5.19; 95% CI 1.98, 13.6], duration of labour above 24 hours [AOR 7.61; 95% CI 2.98, 19.8] and estimated distance of 10 to 50 kilometers from the hospital [AOR 3.89; 95% CI 1.14, 13.3] had higher odds. Higher percentage of maternal (65.2%) and perinatal (60%) complications occurred among cases (p-value < 0.05). Obstructed labour accounted for 8.3% of maternal deaths and 39.7% of stillbirth. Uterine rupture, post-partum haemorrhage and sepsis were the common adverse outcomes among cases. Conclusion Parity, contracted pelvis, non-partograph utilization, longer duration of labour and longer distance from health facilities were determinants of obstructed labour. Maternal and perinatal morbidity and mortality due to obstructed labour are higher. Therefore, improvement of partograph utilization to identify complications early, birth preparedness, complication readiness and provision of timely interventions are recommended to prevent such complications.