Background: Most postpartum women and newborns do not utilize postnatal care due to less emphasis given especially in developing countries. Understanding individual and community-level factors associated with postnatal care will help to design appropriate strategies and policies for improving service utilization. Therefore, this study aimed to assess individual and community-level factors associated with postnatal care utilization in Ethiopia.Method: This study used the Ethiopian Demographic and Health Survey (EDHS) data of 2016. A total of 4489 women who gave birth 2 years before the survey were included. Two-stage stratified cluster sampling technique was used. The analysis was done using Stata version 14.0 after checking for basic assumptions of multilevel logistic regression. Multilevel mixed-effects logistic regression was used to identify determinants of postnatal care utilization. An adjusted odds ratio with a 95% confidence interval was used to show the strength and direction of the association. Results: Husband with secondary education [AOR = 0.17, 95% CI = (0.04, 0.68)], four or more antenatal care visit [AOR = 10.77, 95% CI = (2.65, 43.70)], middle wealth quintile [AOR = 3.10, 95% CI = (1.12, 8.58)] were individual level factors. Community level education [AOR = 2.53, 95% CI = (1.06, 6.06)] and community level of health service utilization [AOR = 2.32, 95% CI = (1.14, 4.73)] were the predictors at community level.Conclusion: Wealth index, number of antenatal care visits, husband education, community level of education and health service utilization were significantly associated with PNC service utilization. Provision of quality antenatal care, improvement of the educational status of women and husband involvement in PNC are important strategies to increase PNC service utilization.