Background: Mental distress is a range of symptoms and experiences of a person's internal life that are commonly held to be troubling, confusing or out of the ordinary. Mental distress often interferes with studying, social interaction, and academic outcomes. Therefore, this study aimed at assessing the prevalence of mental distress and factors associated with it among undergraduate engineering students at Hawassa University. Methods: We conducted an institution-based cross-sectional descriptive study on undergraduate engineering students at Hawassa University. We collected the data from January to April 30, 2018, using interviewer-administered Self-Report Questionnaire 20 (SRQ-20) from 341 participants selected by stratified sampling and we performed multiple logistic regression analysis to find factors associated with mental distress. Results: Out of the total study population, 222 (65.1%) were males, and 172 (50.4%) were age ≥21. We found the prevalence of mental distress using SRQ-20 with a cutoff point ≥8 to be 28.7%. Female students were 2.9 times more likely to have mental distress as compared to male students (AOR= 2.90, 95% CI: 1.52-5.50). Facing financial problem (AOR= 2.20; CI = 1.25-3.85), poor social support (AOR= 2.58, 95% CI: 1.51-4.42), lack of interest in their field of study (AOR=2.57; CI: 1.23-5.38) and unresolved conflict with roommate (AOR= 2.29, 95% CI: 1.08-4.00) were significant predictors of mental distress. Conclusion: This study showed a high prevalence of mental distress among engineering students. So, policymakers, university officials, and parents need to give due attention to engineering undergraduate students for proactive measures.