Diarrheal diseases are a significant cause of morbidity among school-aged children due to inadequate sanitation, lack of access to potable water and poor hygiene practices. Although the incidence of these illnesses can be reduced through improved water quality and the introduction of sanitation and hygiene programs in schools, there is limited evidence to demonstrate the impact of interventions in schools in Ethiopia. The purpose of this study was to compare the prevalence and associated factors of diarrheal diseases in school-aged children between schools in Habru District, north-eastern Ethiopia that adopted water, sanitation and hygiene (WASH) interventions and those that did not. A comparative cross-sectional study was conducted among 640 randomly selected school children (160 from schools that adopted WASH interventions and 480 from schools that did not). Trained data collectors used a pre-tested structured questionnaire and an observational checklist to collect the data. Descriptive statistics, such as frequencies and percentages, were computed to present the prevalence of diarrheal disease. Bivariate and multivariate logistic regression analyses were used to identify factors associated with diarrheal disease. The overall 2-week prevalence of diarrhea among school children was 30.5%. In WASH-implementing schools, the prevalence was 21.9%, significantly lower than in non-WASH-implementing schools (33.3%). In non-WASH-implementing schools, the odds of diarrheal diseases among students were significantly decreased in those students who used a clean school latrine, self-reported latrine utilization at home and were aware of the causes of diarrhea. Similarly, among students in WASH-implementing schools, self-reported latrine utilization at home, personal hygiene inspection and awareness of the causes of diarrhea were factors associated with decreasing odds of diarrhea occurrence. This study identified a high prevalence of a diarrheal disease among children in schools with no WASH interventions compared with schools that do have WASH interventions. This provides strong evidence for strengthening WASH programs in all rural schools to reduce the burden of diarrheal diseases.