Background: In opposite to progressing to achieve target 3.2 of Sustainable Development Goals, which is ending preventable deaths of neonates and under-five years child by 2030, diarrheal disease continued to be the major cause of child mortality in developing countries including Ethiopia. Thus, this study aimed to assess the prevalence of diarrheal morbidity and associated factors among under-five children in southwest Ethiopia. Methodology: An institution-based cross sectional study was conducted among 2233 under-five children at three randomly selected public hospitals of southwest Ethiopia from March 1 to November 21, 2021. Data were collected from mothers/guardians of the index children selected by systematic random sampling using structured interviewer administered questionnaire. Data entered by Epi_data v.4.2 were analyzed by multivariable logistic regression. P-value <0.05 and 95% confidence-interval (CI) was used to ascertain statistical significance. Results were presented by tables and text. Result: This study had a response rate of 90.9%. The two-week prevalence of diarrhea among the under-five children was 701(34.53%). The factors associated with it were being female (AOR 0.26; 95%CI=.172-.4), age 12-23 months (AOR 4.37; 95%CI=2.32-8.24), mothers or guardian with no formal education (AOR 3.55; 95%CI=1.97-6.4), being urban resident (AOR 0.48; 95%CI=0.28-0.84), being 1st born (AOR .08; 95%CI=.03-.26), frequent hand washing (AOR .58; 95%CI=.26-.66), washing child utensils by cool-water & soap (AOR 2.8; 95%CI=2.12-3.57), unprotected water (AOR 3.6; 95%CI=2.13-6.13), having latrine (AOR .03; 95%CI=.02-.05), replacing water in storage daily (AOR .02; 95%CI=.004-.05), and child-self feeding (AOR 2.4; 95%CI=1.57-3.74).Conclusion: The prevalence of diarrheal morbidity among under-five children in southwest Ethiopia is unacceptably high. Accordingly, to reduce the morbidity, it is urgent that the parents, health extension workers, the zonal health departments, and all concerned bodies should struggle their best to strengthen the practices of diarrhea preventive methods and to avoid the risk factors.