Background. Depression is one of the most common mental disorders worldwide and is the second leading cause of disability and major contributor to suicide. Methods. Community based cross-sectional study was conducted among 779 adults residing in Northwest Ethiopia. Multistage cluster sampling technique was used to select study participants. Depression was measured by Patient Health Questionnaire (PHQ-9). Bivariate as well as multivariate logistic regressions were used to identify associated factors. p value of < 0.05 was considered statistically significant. Result. The prevalence of depression was 17.5%, where 10.7% of patients were with mild depression, 4.2% were with moderate depression, 1.9% were with moderately severe depression, and 0.6% had severe depression. Being female, age of 55 years and above, poor social support, having a comorbidity medical illness, current tobacco smoking, and living alone were significantly associated with depression. Conclusion and Recommendation. The prevalence of depression in Ethiopia is as common as the other lower and middle income countries. Female gender, being currently not married, poor social support, low wealth index, tobacco smoking, older age, having comorbid illness, and living alone were significantly associated with depression. So, depression is a significant public health problem that requires a great emphasis and some factors like smoking habit are modifiable.