Background: Utilization of health services is affected by a multitude of factors including not only availability, distance, cost, and quality of services, but also by socioeconomic factors and personal health beliefs. Majority of deaths from obstetric complications are preventable and the fact that every pregnancy faces risk which may not always be detected through the risk assessment approach during Antenatal care, to assure safe and successful delivery outcomes remains to be ensuring skilled personnel attendance of every child birth. The objectives of this study isto assess factors affecting institutional delivery practice among pregnant women Jimma zone. Method: Cross sectional prospective study with quantitative methods of data collection was employed from February to March 2014. A total of 281pregnant women selected by systematic sampling method and data were collected using pre-tested structured questionnaire. Result: Out of 281 questionnaires, 277 were included in the analysis and making a response rate 98.6%. Of this 228(82.31%) had Antenatal follow up , 96.03% and 98.56% them had positive attitude towards institutional delivery practice and know safe delivery practice respectively.There was a significant association between age group, level of education, religion, Antenatal follow up, parity (p-value <0.05). Conclusion and recommendation: The choice of institutional delivery practice was 64.62%. The factors affected mothers' choice of place of delivery includes mother's level of education, total number of deliveries in a life time; religion and ethnicity were found to be predictive for choice of place of delivery. Therefore, responsible bodies should make efforts to increase community based health education, awareness creation and information regarding importance of institutional delivery.