Abstract Background Diabetic Ketoacidosis (DKA) is one of the most serious acute complications of Diabetes Mellitus (DM) and the leading cause of morbidity and mortality in young adults with type 1 diabetes. The mortality rate for DKA ranges from 2 to 5% in developed countries and 6 to 24% in developing countries. Even though many DKA patients were seen in emergency unit of Ethiopian hospitals and health centers, little is known about precipitating factors and clinical-laboratory features of DKA among Ethiopian patients and information is scant to promote better health service to prevent mortality due to DKA. So the aim of this study is to assess the prevalence and associated risk factors of DKA in newly diagnosed Type 1 Diabetic patients in Dilla University Referral Hospital (DURH) from September 9th/2017-May 30th/2019. Methods Quantitative institutional based study was conducted among 421 newly diagnosed type one diabetic patients. Data was double entered from the paper-based abstraction sheet into Epi info version 7 and exported to SPSS version 20 for analysis. A descriptive analysis was performed. Bivariate and multivariate logistic analysis was done to identify factors associated with the magnitude of Keto acidosis. Variables with p-value less than 0.05 were declared as having significant association between factors and dependent variable. Result The magnitude of Diabetic Keto Acidosis (DKA) in newly diagnosed patients with type one diabetic Mellitus (T1DM) was found to be 38%. The significant predictors of Diabetic Keto Acidosis (DKA) among newly diagnosed patients with type one diabetic Mellitus (T1DM) were young age of the adult, family history of diabetes and infection prior to onset of Diabetic Keto Acidosis (DKA). Conclusion The overall magnitude of Diabetic Keto Acidosis (DKA) in adults with newly diagnosed type 1 diabetes is high. In particular, adults between 18-25 years of age have a high risk of Diabetic Keto Acidosis (DKA) at onset of diabetes mellitus. Young Age, first degree relatives with Diabetic Mellitus (DM) and infection prior to Diabetic Keto Acidosis (DKA) are found to be the significant explanatory variable of Diabetic Keto Acidosis (DKA) in primary onset of T1DM.