Diarrhea refers to the abrupt onset of three or more loose or liquid stools per day. It is the second leading cause of death in infants worldwide. It is an endemic disease and continues to be a serious threat to children in Ethiopia. Despite being a condition that may be prevented, diarrhea can have a negative impact on a child's health. Also, studies have not been able to explore the role of socio-economic characteristics in hindering the treatment. Therefore, this study aimed to explore socio-economic factors that influence treatment of childhood diarrhea. Secondary data analysis was conducted based on the demographic and health surveys data conducted in Ethiopia. A total weighted sample of 1227 under-five children was included for this study. Mixed-effect binary logistic regression analysis was done to identify associated factors of untreated diarrhea. Adjusted Odds Ratio with 95% CI was used to declare the strength and significance of the association. Prevalence of untreated diarrhea among under five children in Ethiopia was 57.32% (95% CI 54.52-60.06%). In the mixed-effect analysis; Children aged 6-11, 12-23, and 24-35 (AOR 0.384, 95% CI 0.187-0.789), 71% (AOR 0.29, 95% CI 0.149-0.596), and 51% (AOR 0.49, 95% CI 0.238-0.995). Children from family number six and above (AOR 1.635, 95% CI 1.102-2.426). Children from middle wealth of family (AOR 1.886, 95% CI 1.170-3.3040). Children from a community with high level of uneducated (AOR 2.78, 95% CI 1.065-3.442) were significantly associated with untreated diarrhea. The prevalence of untreated diarrhea among under-five children in Ethiopia is high. Age of child, family number, household wealth, and community-level educational status were significantly associated with untreated diarrhea among under-five children in Ethiopia. Hence, increasing community educational status, boosting the economic status of the community, and family planning for the community should get due attention.