Acute respiratory infections (ARIs), especially pneumonia, remain the leading cause of childhood mortality and the most common reason for adult hospitalization in low- and middle-income countries, despite advances in preventative and management strategies. This study was conducted to assess factors associated with poor clinical outcome of suspected pneumonia cases among hospitalized patients at the three public health hospitals in Southwest district of Ethiopia. A cross-sectional study was conducted from May to July, 2020. Those patients admitted with suspected pneumonia were followed up during their hospital stay, and data on outcomes were captured by study nurses. Socio-demographics, clinical features, and follow-up data were gathered, and analyzed using SPSS versions 20.0. The differences in patients’ outcome in relation to their clinical features and epidemiologically linked exposures were described and compared using chi-square tests at 95% confident intervals. In this study, 742 patients with suspected pneumonia were analyzed. Of these, 473 (62.8%) of them were male, and 264 (35.6%) were of age 1–4 years. About 533 (71.8%) patients with suspected pneumonia were presented with irregular respiratory signs/symptoms (more than one symptoms) and 132 (17.9%) had underline illnesses. About 633 (85.4%) of patients were improved after treatment, and 109 (14.7%) of them ended with poor clinical outcome after completion of their treatment. Age of the patients and presence of comorbid conditions such as HIV/AIDS infections and bronchial asthma were identified as the risk factors for poor outcome of patients with suspected pneumonia. The clinical outcome of patients with suspected pneumonia at the three hospitals in Southwest district of Ethiopia was not satisfactory. Our findings highlight that in order to reduce poor clinical outcome related to suspected pneumonia, the efforts should be focused on some factors like management and prevention of chronic comorbidities. Increasing clinicians’ awareness on early management of suspected pneumonia cases is also essential in reducing the burden of the disease .