Background: Substance abuse has become the major health and health related behavioral problem worldwide. Substance related problems occur in most segments of most societies mainly in the youth. They result in decreased work and school performance, accidents, absenteeism, violent crime, and theft. The objective of this study was to assess the status of substance use and its effect on the academic performance among students of Arba Minch University, Ethiopia.Methods: Institution based cross-sectional study was conducted on 510 university students. Semi-structured, self-administered questionnaire was used to collect the desired information. Data was analyzed using SPSS V. 23 statistical software. Descriptive statistics, binary logistics regression and multinomial regression were employed. Independent sample t-test was also used to indicate the effect of substance use on academic performance.Results: The data was collected from 498 students making a response rate of 97.6%. The overall proportion of students with substance use was 21.3% and among them, the current prevalence was 79.2%. Being Male and having family member or a friend who uses substance were associated with substance use. The results show that, substance users have a lower mean CGPA than non-substance users.Conclusion: The study revealed the prevalence of substance use among the youth to be comparable with other studies conducted the country and that the problem is as worrisome as it is everywhere else. The findings also indicated a negative association between substance use and academic performance.