Background: Neonatal mortality is continuing on top of the agenda of public health and international development agencies. In Ethiopia, it is still high accounts 60% infant mortality and 43% of under-five mortality. However, the distribution of the problem across the regions of Ethiopia is not well addressed. Therefore, this analysis aimed to assess spatial distribution of neonatal mortality and identify associated factors in Ethiopia using the 2016 Ethiopian Demographic Health Survey (EDHS). Exploring spatial distribution and identifying associated factors is important to select priority areas and design effective intervention program to reduce neonatal mortality. Methods: The analysis included 7,193 live births, selected by stratified two-stage cluster sampling techniques. Spatial analysis was done to explore spatial distribution of neonatal death using Geographic information system and Sat scan. Multilevel logistic regression was fitted to identify individual and community level factors associate with neonatal mortality. Results: The hot-spot areas for neonatal mortality were Amhara, West Tigray, northeast, southwest and central part of Oromia. Mother’s with age >35 years (AOR=2.25, 95CI%: 1.47, 3.45), family size of 3-5 (AOR=0.14, 95CI%: 0.06, 0.36) and 6 and above (AOR=0.08, 95%CI: 0.02, 0.20), male neonates (AOR=3.45, 95%CI: 2.27, 5.22), smaller birth size (AOR=1.61, 95%CI: 1.02, 2.54), birth interval less than 2 years (AOR=3.58, 95%CI: 1.66, 7.70) and 2 years and more (AOR=2.54, 95%CI: 1.26-5.11), early initiation of breast feeding (AOR=0.20, 95%CI: 0.09-0.42), had no ANC visit (AOR=1.68, 95%CI: 1.08, 2.60), did not receive PNC services (AOR=3.58, 95%CI: 1.13 -11.33) and C/S delivery (AOR=19.55, 95%CI: 8.07, 47.34) were statistically significant variables for neonatal mortality. Conclusions: High risk areas for neonatal mortality were identified in northern, central and southwest part of the Ethiopia. Individual level variables were important factors associated with neonatal mortality. Focusing on maternal health care services, increase birth interval and initiation of breast feeding early will be needed to reduce neonatal mortality.