Background Common mental illness has a substantial impact on seizure control and negatively affects the overall quality of life among individuals with epilepsy. However, there is a dearth of studies that examined the associated factors of common mental illness among epilepsy patients in Ethiopia, particularly in the study area. This study aimed to assess the magnitude and factors associated with common mental disorders in epilepsy patients who attended government health institutions in Bahir Dar city, Ethiopia. Method Health institution based cross-sectional study was conducted using a systematic sampling technique among people living with epilepsy in Bahir Dar City Administration. Common mental illness was assessed using a self-reporting questionnaire and a semi-structured questionnaire was employed to collect data on socio-demographic and clinical related characteristics. Data were analyzed using descriptive statistics, univariate logistic regression, and multivariable logistic regression. Results The magnitude of comorbid common mental illness among people living with epilepsy was found 35.4%. High magnitude of common mental illness was reported among females (39.9%) when compared to males (32.3%). The most prevalent common mental disorders symptoms include being worried, unhappy feeling, trouble thinking clearly, and difficult to enjoy daily activities. Family history of epilepsy, frequent seizures attacks, side effects of antiepileptic drugs, lack of social support and not adherent to antiepileptic drugs were factors associated with common mental illness. Conclusions Common mental illness was found to be prevalent among people living with epilepsy. Therefore, it is recommended that great attention should be given to mental illness besides controlling seizure attacks.