Background: Diabetes Mellitus is a chronic disease and can be self-managed using five treatment approaches, including education, medical nutrition therapy, physical exercise, pharmacological intervention, and blood sugar monitoring. Improvement of patient compliance and self-efficacy are critical points that impact the self-care behavior in patients with type two diabetes mellitus in order to limit the morbidity and promote glycemic control. Therefore, the present study successfully assesses the effect of perceived self-efficacy and associated factors among patients with diabetes mellitus at public hospitals of western Ethiopia. Methods: The cross-sectional study design was employed on a sample of 423 diabetic patients. A systematic random sampling method was employed. An interviewer-administered structured questionnaire was used. The data entered into Epi data version 3.1 and exported into Statistical Package for the Social Sciences window version 24 for analysis. All variables significant at p <0.25 in bivariate were entered into multivariate analysis. The multivariable logistic regressions were used to determine factors associated with perceived self-efficacy by considering adjusted odds ratio at CI 95% and the significance level was set at p <0.05. Results: Out of 423 participants sampled, 398 participated in the study giving a response rate of 94.1%. The level of perceived good self-efficacy among diabetes patients was 52.5%. Being married (AOR=1.611, 95% CI = 1.003, 2.587), home blood glucose test (AOR=3.359, 95% CI = 1.912,5.903), doing exercise (AOR=11.412, 95% CI = 2.488,52.346), having good appetite (AOR=2.587, 95% CI = 1.454,4.606), having special diet (AOR=4.902, 95% CI= 1.202, 19.992), and good self-care behavior (AOR=10.320, 95% CI= 5.657, 18.824) were significantly associated with good self-efficacy. Conclusion: The level of perceived self-efficacy was high. Home blood glucose tests, good self-care behavior, married, doing exercise, good appetite, having a special diet were significantly associated with high perceived self-efficacy. The national policymaker focused on patients' behavioral change to develop perceived self-efficacy for confidently managing the disease.