Objective: Evidence suggests postnatal care contributes to reductions in maternal mortality. In Ethiopia, the proportion of women who do not utilize postnatal care after birth is high and the frequency of postnatal checks falls short of the four visits recommended by World Health Organization. This study examined risk factors associated with non-utilization of decentralized local health facilities, namely, health posts, health centers, and a primary hospital, for postnatal care services in Gida Ayana Woreda in rural western Ethiopia. Methods: In this study, 454 mothers were examined for the following risk factors: kebele (the smallest administrative unit in Ethiopia) in which decentralized health care facilities were located, postnatal woman’s age, antenatal care service visit, experience of postnatal complications, knowledge of postnatal complications, knowledge of the recommended number of postnatal care visits, knowledge of the availability/provision of postnatal care, and health extension workers’ home visits. Bivariate and multivariable logistic regression analyses were applied to identify predictors of non-utilization of decentralized local facilities for postnatal care services. Results: Over half (55.7%) of the women did not utilize postnatal care within 42 days of delivery, and only 10.0% utilized the care considered appropriate according to World Health Organization guidelines. After adjusting for various potential confounding factors, we found the following risks to be strongly associated with non-utilization of decentralized health care facilities for postnatal care services: some outer rural administrative decentralization entities such as Angar, Lalistu, and Ejere kebeles; age 35 years or older (adjusted odds ratio = 3.4, 95% confidence interval: 1.4–8.3), not receiving antenatal care during this pregnancy (adjusted odds ratio = 2.0, 95% confidence interval: 1.1–3.7), no experience of any postnatal complications (adjusted odds ratio = 3.3, 95% confidence interval: 1.7–6.4), and no knowledge of at least one postnatal complication (adjusted odds ratio = 2.0, 95% confidence interval: 1.2–3.3). Risk factors highly but less strongly associated with women’s non-utilization of postnatal care services were no knowledge of the standard number of postnatal care visits recommended, no knowledge about the availability/provision of services at a local health facility, and no home visit from health extension worker by day 3 post-delivery. Conclusion: The risk factors for women’s non-utilization of decentralized health care facilities for postnatal care identified in this study need to be considered in interventions for enhancing the utilization of the service and reducing maternal and newborn deaths in rural western Ethiopia. Strengthening of postnatal care services, especially in the more remote kebeles, should include upgrading of the referral system and expansion of counseling of women by health extension workers.