Background. Though the goal of healthcare institutions is patient safety, errors have been committed by healthcare providers. Incident reporting behavior enhances patient safety by reducing the repeated occurrence of errors in the health facility. Therefore, this study aims to identify incident disclosing behaviors and associated factors among nurses working in referral hospitals, Northwest Ethiopia. Methods. Institution-based cross-sectional study design was conducted among randomly selected 319 nurses working in referral hospitals of Amhara region from March 1–30, 2019. Data were collected using a self-administered structured questionnaire. Data were coded and entered into EpiData 4.2 software and exported to Statistical Package for Social Sciences version 25 for analysis. All variables with
p
value <0.25 during bivariable binary logistic regression analysis were considered for multivariable binary logistic regression analysis. Odds ratio along with 95% CI was estimated to measure the strength of the association. Level of statistical significance was declared at
p
value ≤0.05. Results. The proportion of nurses who reported incidents was 31.9% (95% confidence interval (CI), 27, 3)). Fear of administrative sanctions (adjusted odd ratio (AOR) = 0.45; 95% CI, 0.22, 0.90), fear of legal penalty (AOR = 0.27; 95% CI, 0.14, 0.50), lack of feedback (AOR = 0.29; 95% CI, 0.13, 0.66), nonsupportive environment (AOR = 0.27; 95% CI, 0.14, 0.52), and feel that reporting to colleague is easier (AOR = 2.65; 95% CI, 1.35, 5.20) were all found to be significant factors. Conclusions. The proportion of nurses who reported incidents was low. Fear of administrative sanctions, fear of legal penalty, lack of feedback, nonsupportive environment, and felling that reporting to colleagues was easier are found to be significant factors. Developing a system that encourages critical incident reporting behavior and provide protection from penalties for nurses to report incidents for the enhancement of patient safety and quality of care at each health facility and regional level is crucial.