The study aims to assess the prevalence and associated factors of stress among Ambo University students. Institute based cross-sectional study was conducted on a sample of 343 undergraduate students at Ambo University. Data were collected using the Student-life Stress Inventory. Descriptive statistics, independent t-test, analysis of variance (ANOVA) and Pearson correlation coefficient were utilized to analyze the collected data using statistical package for social sciences (SPSS) version 20. The general life time prevalence of stress was 24.5%. More specifically, fear of academic failure, fear of family disappointment, lack of motivation and interpersonal relationship problem were highly reported symptom of stress students. Likewise, academic overload, projects or assignments timings, political situation of country, financial strain, high family expectations, study skill problem, being alone, procrastination, living away from home, difficulty reading materials, language barrier, acculturation, relationship with opposite sex, lack of entertainment in the University, lack of family support, inability to socialize with peers, adjustment with roommate, family problems, time management problem, and lack of personal interest in their department were frequently reported causes of stress in the University respectively. In this study, the independent t-test result shows that there was a statistically significant mean difference in experiencing stress across students’ sex and residential area. Besides, ANOVA result revealed that year of study, students’ perceived social support and perceived parenting style of the respondents had a significant effect on stress. However, statistical significant mean differences were not observed in experiencing stress across respondents’ monthly family income. Also, a statistically significant negative and moderate relationship was reported between stress and academic achievement. Nearly one fourth of students were suffering from measureable stress. Therefore, Ambo University management shall strengthen the academic counseling and preventive mental health services for the students so as to provide a conducive learning environment. Key words: Stress, undergraduate, students, Ambo University.