Background: A common mental disorder is characterized by anxiety, depression, and unexplained somatic symptoms that usually encountered in community and primary care settings. Both short and long term bio psychosocial disabilities are inevitable if common mental disorder is not treated. Despite its impact, the prevalence of common mental disorder in the Illu Ababore zone is not well known. Therefore, this study aimed to assess the prevalence and associated factors of common mental disorder among Ilu Ababore zone residents, Southwest Ethiopia. Method: A community based cross-sectional study was conducted from July 1 to August 30, 2018. A multi-stage sampling technique was applied to recruit participants. Self-Reporting Questionnaire (SRQ-20) was used to assess the presence of common mental disorder. The data were entered into Epidata version 3.1 and analyzed by using SPSS version 23 software. Bivariate and multivariate binary logistic regressions were computed to identify the associated factors. Statistical significance was considered at P value < 0.05. Result: A total of 690 participants were enrolled in this study with a response rate of 91.39%. The prevalence of common mental disorder was 27.2% (95% CI, 23.9, 31.0%). Being female (AOR = 1.76, 95% CI = 1.15, 2.69), unable to read and write (AOR = 3.06, 95% CI = 1.37, 6.82), living in the rural area (AOR = 3.53, 95% CI = 2.01, 6.18), having a family member with mental illness (AOR = 2.68, 95% CI = 1.6, 4.5), having a chronic physical illness (AOR = 3.48, 95% CI = 2.26, 5.34) and lifetime alcohol use (AOR = 4.55, 95% CI = 2.93, 7.0) had a significant association with common mental disorder. Conclusion: The current study showed that the proportion of the common mental disorder was high. Females showed a higher prevalence of the common mental disorder. Having a chronic physical illness, resides in the rural areas and history of lifetime alcohol use were also significantly associated with CMD. Psychological and social interventions with greater emphasis on females who have low educational status and residing in the rural area are recommended. Strategies that focus on the proper treatment of chronic physical illness can be also helpful to minimize the occurrence of common mental disorder.