Anemia is predicted to affect 38% (32 million) of pregnant women worldwide. However, evidence for utilization and compliance with iron supplementation and predictors during pregnancy in low-income countries, including Ethiopia, is sparse and inconclusive. Therefore, we aimed to assess utilization and compliance with iron supplementation and predictors among pregnant women in Robe Town, Southeast Ethiopia. A community-based cross-sectional study was employed among randomly selected 445 pregnant women attending antenatal care at health facilities from May to July 2015. A systematic random sampling was used to select respondents. Data were collected using a pre-tested, interviewer-administered, structured questionnaire. Bivariable and multivariable logistic regression analyses were conducted to identify predictors of compliance with iron supplementation. An odds ratio, along with a 95% confidence interval (CI), was used to estimate the strength of the association. In this study, 54% [95% CI (49.4, 58.4%)], 45.2% [95% CI (40.9, 49.4%)], 4.3% [95% CI (2.5, 6.3%)], and 2.2% [95% CI (1.1, 3.6%)] of women received iron supplements during their first, second, third, and fourth antenatal care visits, respectively. The level of compliance with iron supplementation was 92.4% [95% CI (89.9, 94.6%)]. Having a formal education (AOR = 4.45, 95% CI 1.41, 13.99), being in the high wealth quintile (AOR = 0.18, 95% CI 0.05, 0.68), medium wealth quintile [(AOR = 0.33, 95% CI (0.11, 0.98)], receiving iron supplements for free (AOR = 3.77, 95% CI 1.33, 10.69), not experiencing discomfort related to iron supplements intake (AOR = 2.94, 95% CI 1.17, 7.39), having comprehensive knowledge about anemia (AOR = 2.62, 95% CI 1.02, 6.70), being knowledgeable about iron supplements (AOR = 3.30, 95% CI 1.12, 9.76), having information about importance of iron supplementation during pregnancy (AOR = 2.86; 95% CI 1.04, 7.87), and ever being visited by urban health extension workers (AOR = 0.31; 95% CI 0.12, 0.83) was significantly associated with compliance with iron supplementation during pregnancy. The utilization of iron supplementation during pregnancy was low, with relatively high compliance with the supplements. Thus, comprehensive nutrition education and free provision of iron supplementation are crucial tools to increase utilization and compliance with iron supplementation during pregnancy. Further research with a strong study design using golden standard methods is warranted.