BACKGROUND: Childhood diarrhea is the major contributor to the deaths of children under the age of 5 years in Ethiopia, but evidence at the national level to identify the contributing factors associated with diarrhea by considering the clustering effects is limited. Hence, this study aimed to identify factors associated with childhood diarrhea at the individual and community levels. METHODS: A secondary data analysis was conducted using the 2011 and 2016 Ethiopian Demographic and Health Survey (EDHS) data. A total of 23 321 children with their mothers were included in this study, and multilevel logistic regression models were applied for the data analysis. RESULTS: The odds of diarrhea among female children were 13% lower (AOR = 0.87; 95% CI: 0.79-0.94) compared with male children. The odds of diarrhea among children aged between 13 and 24 months were 31% higher than (AOR = 1.31; 95% CI: 1.17-1.47) their younger counter parts. Children aged ⩾25 months (AOR = 0.50; 95% CI: 0.45-0.56), those whose mothers were unemployed (AOR = 0.79; 95% CI: 0.73-0.87), and children live in households between 2 and 3 under-5 children (AOR = 0.87; 95% CI: 0.79-0.96) were associated with lower odds of experiencing diarrhea. The odds of diarrhea among children whose mother had no formal education were 49% higher than (AOR = 1.49; 95% CI: 1.08-2.07) their counterparts. Besides, children residing in city administrations (AOR = 0.69; 95% CI: 0.58-0.82) had lower odds of experiencing diarrhea than children living in agrarian regions. CONCLUSIONS: At the individual level (sex and age of the child, mother's employment status, and educational level, and the number of under-5 children) and the community-level (contextual region) were found to be significant factors associated with childhood diarrhea in Ethiopia.