Background: In low-and middle-income countries, the proportion of pregnant women who use health facilities for delivery remains low. Although delivering in a health facility with skilled health providers can make the critical difference between survival and death for both mother and child, in 2016, more than 25% of pregnant women did not deliver in a health facility in Uganda. This study examines the association of contextual factors measured at the community-level with use of facility-based delivery in Uganda, after controlling for household and individual-level factors. Methods: Pooled household level data of 3310 observations of women who gave birth in the last five years is linked to community level data from the Uganda National Panel Survey (UNPS). A multilevel model that adequately accounted for the clustered nature of the data and the binary outcome of whether or not the woman delivered in a health facility was estimated. Results: The study findings show a positive association at the county level between place of delivery, education and access to health services, and a negative association between place of delivery and poverty. Individuals living in communities with a high level of education amongst the household heads were 1.67 times (95% Confidence Interval: 1.07-2.61) more likely to have had a facility-based delivery compared to women living in communities where household heads did not have high levels of education. Women who lived in counties with a short travel time (less than 33 min) were 1.66 times (95% CI: 1.11-2.48) more likely to have had a facility-based delivery compared to women who lived in counties with longer travel time to any health facility. Women living in poor counties were only 0.64 times (95% CI: 0.42-0.97) as likely to have delivered in a health facility compared to pregnant women from communities with more affluent individuals. Conclusions: The findings on household head's education, community economic status and travel time to a health facility are useful for defining the attributes for targeting and developing relevant nationwide community-level health promotion campaigns. However, limited evidence was found in broad support of the role of community level factors.