Background: Maternal mortality due to unsafe abortion, prolonged labour, eclampsia and other reasons has been the major problem across the globe especially in developing countries. This is because; most of those deliveries occur outside health care facilities and assisted with nonprofessionals. Aim: To assess magnitude and factors associated with institutional delivery practice and its determinants among mothers who gave birth during the past one year in Mizan Aman Town, Bench Maji zone, South West Ethiopia. Methods and Materials: Community based cross sectional study was conducted among mothers who gave birth during the past one year from April 10 to May 10, 2017. Structured and pretested questionnaire was used for data collection. Data was analyzed using SPSS version 20 software. Crude and adjusted Odds ratios were computed for selected variables and P-value less than 0.05 was considered to be statistical significant. Results: Only 54.2% of mothers gave birth at health facilities. Husbands educational level, decision about the cost related to health care/for referral or reaching health facility and place of antenatal care follow up were associated with institutional delivery service utilization. Conclusion: In contrast to studies conducted in other parts of the country and the Ethiopia Demographic health survey result of 2016, the number of women who had given birth at health care facilities in Mizan Aman city administration was higher. However, it was below the health sector transformation plan of the country that has a plan to raise institutional delivery supported by health personnel to 95%. Thus increasing awareness of mothers and their partners about the benefits of institutional delivery services are recommended.