Home delivery is common in sub Saharan states including Ethiopia leading to cause morbidity and mortality of maternal and child health. This study aims to determine factors affecting utilization of institutional delivery among mothers of under two-year-old children in Gambella regional state, Ethiopia. Methods: A cross sectional study which approach 404 mothers of under two years old children by using multistage and purposive sampling technique. Data was collected by self-administer questionaire to examine the prevalence of institutional delivery and factors affecting. Descriptive statistic and Pearson’s Chi-square were performed to describe and determine the associations. Results: The study shows that 69.3% of respondent’s delivery in the health facility, whereas, 26.7% delivery at home and those deliveries on the road and ambulance was 4%. This study disclosed that most of respondents had low level of knowledge on pregnancy complications (65.6%). Education of the mother, ethnicity, attitude, transport accessibility, availability of maternal source of health information, availability of female skilled birth personnel, Antenatal Care visit, and accessibility to 24 hours’ service were significantly associated to institutional delivery. Conclusion: Institutional delivery is affected by many factors. The government and health professionals should promote education regarding the danger signs of pregnancy, pregnancy complications, and benefits of institutional delivery.  
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