BACKGROUND: The utilization of skilled care before, during, and after childbirth can significantly reduce maternal mortality and save the lives of women and newborns. However, maternal and child mortality remain high and continue to pose a persistent challenge for low-income countries. Therefore, this study was conducted to identify individual- and community-level factors associated with institutional delivery in Ethiopia. METHODS: A cross-sectional study design with two-stage clustered sampling was employed using data from the 2016 Ethiopian Demographic and Health Survey (EDHS) to identify individual- and community-level factors associated with institutional delivery in Ethiopia. The study included 643 clusters (communities) and 7,091 women aged 15-49 years. Data were analyzed using two-level mixed-effects logistic regression to estimate the fixed effects of individual- and community-level factors and the random intercept for between-cluster variability, using R software version 3.5.3. RESULTS: In this study, over two-thirds (68%) of women gave birth at home. Institutional delivery was more likely among women with higher education, greater household wealth, frequent antenatal care attendance, and partners with secondary education. Conversely, it was less likely among women with more children and those perceiving long distances to health facilities as a barrier. At the community level, higher average education, media exposure, and recent use of health services were associated with greater institutional delivery use, while rural residence, perceived distance barriers, and regional disparities were linked to lower use. CONCLUSIONS: Both individual- and community-level factors were significantly associated with institutional delivery, in both positive and negative directions. Therefore, the Government of Ethiopia and relevant stakeholders should give due attention to the key factors identified in this study.