Background: Diarrhea remains one of the principal causes of morbidity and mortality in children in developing countries. A major contributing factor is the treatment provided by the mother. The current study was carried out to assess the behavior of mothers in seeking modern health care and its impact on childhood diarrhea in the Central Ethiopia. Methods: A comparative cross-sectional study was conducted in randomly selected mothers or care providers who had at least one child under five years who had experienced diarrhea within the previous two weeks. Descriptive statistics, bivariate, and multiple regression analyses were performed. P-values less than 0.05 and 95% confidence intervals were used to determine an association between independent and dependent variables. Results: Ninety-five percent (413/434) mothers or care-providers completed the survey. Seventy-seven percent of urban and 54.4% of rural women sought care at a health institution. Mothers who lived in urban areas were four and half times more likely to seek modern treatment than rural dwellers [OR (95%CIs)=4.49(2.07, 9.7)], while mothers with grade 9-12 levels of literacy were nine times more likely to seek modern treatment than illiterate mothers [8.88 (1.15, 68.6)]. Households using latrines and with income greater than 30USD per month were 4.6 and 3.3 times more likely to seek modern treatment than who used open fields and who earned less than 30USD per month, respectively [4.62 (1.84, 11.60) and 3.31(1.45, 7.54)]. Increased fluids were given to only 50.8% urban and 26% rural children with diarrhea. Notably, fluids were stopped in 3.8% and 11.4% of urban and rural children, respectively, while fluid intake was reduced in 6.8% urban and 19.2% rural children. Conclusion: Socioeconomic factors such as the educational status of the women, the distance of health care facilities, and the method of disposing of excreta were significantly associated with the behavior of the mother in seeking modern treatment. An urgent requirement for improved health education and infrastructure for women is needed.