Physical inactivity has been viewed as an emerging public health problem in developing countries including Ethiopia. Diabetes mellitus (DM) is a group metabolic disorder characterized by chronic hyperglycemia resulting from defects in insulin secretion, function, or both. Its prevalence increases with changing lifestyles including physical inactivity across the globe. However, there is limited research, and not yet received attention in Ethiopia. This study aimed to assess the prevalence and associated factors of physical inactivity among adult diabetic patients in Felege Hiwot Referral Hospital, Bahir Dar, Northwest Ethiopia. An institutional-based cross-sectional study design was conducted among 308 participants from February to June 2018 at Felege Hiwot Referral Hospital. A face-to-face interview was conducted using a structured questionnaire by trained data collectors. Participants were selected through a systematic random sampling technique. Physical inactivity was assessed by the international physical activity questionnaire (IPAQ). Collected data were entered in Epi info version 7 and transferred to SPSS version 20 for analysis. A summary of descriptive statistics and multiple binary logistic regression analyses were computed to identify associated factors of physical inactivity among adult diabetic patients. P < 0.05 with 95% CI was considered statistically significant. The overall prevalence of physical inactivity among diabetic patients was 30.5% ( 95% CI: 22.8–33.5%). Gender (AOR = 1.5, 95% CI: 1.1, 3.62), Old age (AOR = 18.17, 95% CI: 22.7, 61.9) Residence (AOR = 4.24, 95% CI: 1,12,16.028), Low self-efficacy (AOR = 20.59, 95% CI: 10.598, 41.608), Poor attitude (AOR = 2.75, 95%CI: 1.44,5.28), and Lack of social support (AOR = 4.22, 95% CI: 1.28,4.07) were found significantly predictor factors of physical inactivity. The prevalence of physical inactivity in this study was high. Being female, old age, dwelling in an urban, having low efficacy, poor attitude, and lack of social support was greater risk factors for being physically inactive. Diabetic education should focus on engagement in physical activity by overcoming barriers to performing physical activity. Government and health professionals should emphasize that evidence-based physical activity important to change their attitudes and require reaching a consensus on social support by their families.