Background The process of adjusting to new circumstances is known as adjustment. It is a psychological concept that refers to the behavior that permits people to meet the demands of the environment. A university is a new environment that triggers different reactions among first year students. Getting used to university life becomes a challenge. It is required to deal with difficulties, stressful situations, as well as to manage problems and obstacles that arise in regular life. Objective To assess the prevalence and associated factors of adjustment problem among first year dilla university students dilla, Southern Ethiopia 2022. Method and Material An institutional-based cross-sectional study was used among first year dilla university students. Data was collected by using on self-administered structured questionnaire to assess socio-demographic, personal factor, environmental factor and social factors. A Simple random sampling technique will be employed to get the sample. SACQ was used to assess adjustment problem first year students in university. The collected data was coded and entered into SPSS version 20 for analysis, Bivariate and multivariate logistic regression analysis was conducted to identify associated factors of adjustment problem in first year dilla university students. The statistical significance was set at P-value < 0.05. Result A total of 406 respondents were involved in the study with response rate of 95.98%. Of respondents 241(59.4%) were male and 165(40.6%) were female. Overall prevalence of adjustment problem was 54.4%. Female students AOR = 3.606 with 95% CI (2.010,6.471), students’ residences were rural AOR = 3.924 with 95% CI (2.254,6.833), Personal factors AOR = 6.963, 95% CI:(3.188, 15.206), social factors AOR = 2.966, 95% CI: (1.503, 5.855 were significantly associated with adjustment problem. Conclusion and recommendation: A high prevalence of adjustment problems was discovered. Female students, students that come from rural areas, social factors and personal factors were significantly associated with adjustment problem. Other than academic issues, experienced lecturers provide full orientation about social life, campus environment, and coping mechanisms for these challenges was recommended