Objective The study aimed to assess the effect of inter pregnancy interval on preterm birth in Northern Ethiopia: prospective cohort study. Result This study showed that, total incidence of premature birth was 10.4%. Among mothers with short inter pregnancy interval the incidence of preterm birth was 39 (25.9%).Whereas, among mothers who had recommended inter pregnancy interval was 9 (2.9%). Short inter-pregnancy interval [adjusted hazard ratio (AHR): 6.85, 95% confidence interval (CI) 3.07–15.31], antenatal care (ANC) visit 1–3 times (AHR: 2.24, 95% CI 1.04–4.85), complication during pregnancy (AHR: 3.16, 95% CI 1.58–6.33) and birth defect (AHR: 8.01, 95% CI 2.56–25.07) were predictors of premature birth.