Youth (15-24 years) are particularly vulnerable to HIV, because of the strong influence of peer pressure and the development of their sexual and social identities. The aim of the study was to assess voluntary counseling and testing utilization and associated factors among young people in Birbir town, Southern Ethiopia. A community based cross sectional study design was conducted from August 13-16, 2016. Simple random sampling technique was used to select 400 young’s. Semi structured questionnaire was used. The data was collected by trained Nurses. Data was entered and analyzed using SPSS version 20. Binary and Multivariable Logistic regression was performed with 95%CI, COR and AOR respectively. The finding was presented by tables, and figures. In this study a total of 378 youth were participated with response rate of 94.4%. The mean age of the participants was 20.6 years with SD (±2.7). The majority (96%) of respondents were heard about the confidential voluntary counseling and testing service. The prevalence of voluntary counseling and testing utilization was 64.3%. The factors such as: peer encouragement [AOR=3.81, 95%CI, (2.302, 6.285)], knowing definition of voluntary counseling and testing [AOR = 13.38, 95% CI, (1.501, 119.338)], willingness to test [AOR = 10.65, 95% CI (1.268, 89.459)], health institution encouragement [AOR=1.989, 95%CI (1.076, 3.676)]and Method of testing [AOR = 0.51, 95% CI (0.289, 0.889)] were the factors associated with voluntary counseling and testing utilization. The study shows that voluntary counseling and testing utilization was 64.3%. Knowing definition of voluntary counseling and testing, methods of testing, willingness to test, health institution encouragement and peer encouragement were the factors associated with voluntary counseling and testing utilization. Health office has to work with and facilitate youth clubs to promote voluntary counseling and testing utilization and strengthen facility based testing.