Background Stunting is impaired linear growth of children: they experience stunting in the first 1000 days after conception and is an indication of chronic malnutrition. Children under the age of two are regarded as the most vulnerable to malnutrition due to their rapid growth and greater exposure to infectious disease. Objective To assess the magnitude and associated factors of stunting among 6 to 23-month-old children in drought-vulnerable kebeles of the Demba Gofa district, southern Ethiopia. Methods A community-based cross-sectional study was conducted from February to March 2021. Systematic random sampling was used to select pairs of mothers/caregivers with children aged 6 to 23 months. A semistructured questionnaire and anthropometric measurement were used to collect the data. The data were checked coded and entered into Epi-data version 3.1 and exported to SPSS for Windows version 20.0 for analysis. Simple and multivariable linear regressions were conducted. The level of significance was declared at 95% CI and p-value < 0.05. Results The magnitude of stunting in the study area was 79(21.82%). Household dietary diversity [β = 0.217, 95% CI, 0.093–0.342], early initiation of complementary feeding [β = 0.444, 95% CI, 0.344–0.543], frequency of breastfeeding within 24 h [β = 0.217, 95% CI, 0.179–0.263] and child eating animal source food [β = 0.351, 95% CI, 0.196–0.506] were positively significant predictors of child height/length-for-age (HAZ). Conclusion The extent of stunting in the study area is relatively lower than that in regional and national reports, but one out of five children were still stunted. Therefore, health education on infant and young child feeding practices should be provided to mothers to reduce the problem.