Background Knowledge of abortion law is a key determinant of the utilization of safe abortion services. Neglecting it can lead to high social and economic costs, both immediately and in the future. One of the major reasons for not utilizing the safe abortion by the youth female is inadequate knowledge about the abortion law. Therefore the aim of this study was to assess knowledge on abortion law and associated factors among female regular undergraduate students of Ambo University. Methodology Institutional-based cross-sectional study was conducted on 795 randomly selected undergraduate female students of Ambo University using structured and pre-tested questionnaire from March, 28-May, 18, 2018.The result of the analysis was presented by tables using descriptive frequency percentage and odd ratios. The result was presented using tables. Bivariate and multivariate logistic regression was done between dependent and independent variables at 95% confident interval and P value < 0.05. Result Majority (79%) of the study participants were not able to identify all the conditions under which abortion is legally available in Ethiopia. In this study receiving health education on abortion law (AOR = 7.382, 95% CI: (1.118–48.761), knowing where safe abortion can be performed (AOR = 3.116, 95% CI: (1.854–5.239)) and being member of health club in the university (AOR = 2.092, 95% CI:1.256–3.484) were the predictors of abortion law knowlwdge . Conclusion The study concluded that knowledge of female student’s on abortion law is low in the study area. In this study, participates who received health education on abortion law and having involving in the health club at university were found to be the predictors of knowledge on abortion law .