Background: Diabetes mellitus is one of the most common metabolic disorders which is characterized by multiple long-term complications affecting almost every system in the body. Foot ulcer is one of the main complications of diabetes mellitus. The prevalence of foot ulcers ranges from 4% to 10% among persons diagnosed with diabetes mellitus. The objective of this study was to assess the prevalence factors associated with foot ulcer among diabetes patients in Ayder referral hospital. Methods: This institutional based cross sectional study was conducted in Ayder referral hospital from in December 2013-January 2014. Systematic random sampling was used to select 228 participants. Structured questionnaire developed from the literatures was used to collect data. Data analysis was done manually and summarized using descriptive statistics as well as texts, figures, and tables were used to present the findings. Data was collected after getting approval for the project proposal from Mekelle university department of nursing ethical review committee. Result: Among the 228 study participants all of them have regular follow up to the diabetic clinic of Ayder Referral hospital and 75% of them had type 2 diabetic mellitus. 12% of the 228 diabetic patients have foot ulcer currently with 38% of them are with Wagner's grade 0 Conclusion: this study concluded that 12% diabetic patients have foot ulcer. The main reasons to develop foot ulcer were poor glycemic control, wearing inappropriate Shoes and having no special foot care.