Objectives: The aim of the study was to determine the distribution and antimicrobial susceptibility profile of bacteria recovered from the sewage systems of health institutions found in Hawassa, Sidama Regional State, Ethiopia. Methods: A cross-sectional study was conducted from 20 October 2020 to 1 December 2020. A total of 27 sewage samples were collected at two points, namely, before entering the septic tank and from the septic tank of seven health institutions. Samples were inoculated onto Mannitol salt agar, Blood agar, and MacConkey agar, and incubated for 24 h at 37°C. Bacteria were identified using colony morphology, Gram staining, and biochemical tests. An antimicrobial susceptibility test was performed using the Kirby–Bauer disk diffusion method. Data were analyzed by SPSS, version 25, and results were presented in text and tables. Results: All sewage samples ( n = 27) examined in the current study contained potential pathogenic bacteria. Overall, 129 different types of bacteria were identified. Of isolated bacteria, 14 (10.8%) were Gram positive, while 115 (89.2%) were Gram negative. The most prevalent bacteria were Escherichia coli ( n = 27, 20.9%) followed by Shigella species ( n = 26, 20.2%), Pseudomonas species ( n = 25, 19.4%), Salmonella species ( n = 25, 19.4%), Staphylococcus aureus ( n = 14, 10.9%), and Klebsiella species ( n = 12, 9.3%). All bacteria were susceptible to azithromycin. About 80% of bacteria were resistant to ampicillin, whereas greater than 80% of bacteria were susceptible to norfloxacin, ciprofloxacin, and gentamicin. Conclusion: All sewage systems of health institutions included in the current study contained different types of pathogenic bacteria, which are resistant to commonly prescribed antibiotics.