Objective: The study aimed to assess the prevalence of obstructed labor and associated factors among women delivered at public hospitals in Southern Ethiopia. Methods: Institution-based cross-sectional study was employed among 704 systematically selected postnatal women. The data were collected by the structured and pre-tested interviewer-administered questionnaire and analyzed by Statistical Package for Social Science version 20. Multivariable logistic regression with a 95% confidence level was used to determine the associated factors. Statistical significance was declared at p < 0.05. Result: The prevalence of obstructed labor was 15.8% (95% confidence interval: 13.1–18.5). Age (adjusted odds ratio = 5.23, 95% confidence interval: 2.98–11.12), antenatal care follow-up (adjusted odds ratio = 1.8, 95% confidence interval: 1.10–3.39), duration of labor (adjusted odds ratio = 4.41, 95% confidence interval: 2.56–7.67), and experiencing complications (adjusted odds ratio = 4.21, 95% confidence interval: 2.63–6.98) were significantly associated with obstructed labor. Conclusion: The study revealed that one-sixth of women experienced obstructed labor. Regional health sectors and non-governmental organizations need to collaborate with healthcare providers in providing improved maternal health services with special emphasis on teenage women with optimum and proper follow-up throughout the pregnancy, by early identifying complications during labor and delivery to manage the problem early.