Acute transfusion reaction is mainly related to the infusion of blood or blood products resulting at any time within a day of the intervention. It ranges from a non-specific febrile episode to a life-threatening intravascular hemolysis. The severity of the reaction and the degree of morbidity are usually related to the degree of ABO incompatibility and the volume of blood transfused. Therefore, this study aimed to determine the incidence of acute transfusion reactions and its associated factors in Jimma University Medical Center, southwest Ethiopia. Institution-based cross-sectional study was conducted from 1 October to December 30, 2020. A total of 384 transfused patients were followed in this study. Socio-demographic and clinical data were collected through a structured questionnaire. Baseline measurement and 24-hour periodic vital signs monitoring were conducted after each transfusion. Four milliliters of venous blood were drawn after transfusion intervention from each distrusted patient for complete blood count, blood group phenotype, direct antihuman globulin test (DAT), and crossmatching. Data were entered into Epi data version 3.1 and analyzed using Statistical Package for Social Science software (SPSS) version 20. Descriptive statistics, and bivariable and multivariable logistic regression were employed to test the association between independent and dependent variables. A P value ≤ .05 was considered to indicate statistical significance. Acute transfusion reactions were diagnosed in 5.7% of patients, with most of these reactions were febrile nonhemolytic reactions (63.6%) followed by allergic (36.4%) reactions with mild clinical manifestations (27.3%). Transfusion history, transfused blood that was kept for more than 13 days, abortion history, and number of transfused units (≥3 units of blood/blood component) have 3.3, 3.85, 4.2, and 3.9 times greater odds, respectively, besides their significant association with the incidence of acute transfusion reactions. Patients with a history of previous transfusion, abortion, multi-unit transfusion, and patients transfused with blood stored for ≥14 days should be closely monitored. Starting a hemovigilance system of monitoring, collecting, and evaluating data on adverse effects of blood transfusion locally and nationally will decrease the occurrence of acute transfusion reactions.