Pregnancy termination is considered to have adverse effects on women’s health and to have created financial, economic, and social problems in their lives. This study aimed to identify factors associated with pregnancy termination in Sri Lanka. The study used 2016 Sri Lanka Demographic and Health Survey (DHS) data of 16,323 ever-married women aged 15–49, who were clustered in selected enumerated areas. A binary logistic random intercept multilevel model was fitted to find the association between pregnancy termination and the predictor variables in this study. The overall pregnancy termination rate among Sri Lankan women was 16.14%. Increasing age of women was found to be associated with increasing odds of pregnancy termination. Women who were overweight or obese had higher odds of pregnancy termination, with 14% and 36%, respectively, compared to women with a normal weight. With increasing parity, the likelihood of pregnancy termination decreased. Women who used contraceptives had a 24% higher likelihood of pregnancy termination than those who refrained from using them. Cohabiting women had a 57% higher chance of pregnancy termination. Working women had 15% higher odds than unemployed women. Women who experienced domestic violence had a 14% higher odds of pregnancy termination than those who did not. Women from the Northern, Eastern, and North Central provinces had a lower likelihood of pregnancy termination compared to those from the Western province. Women in the urban sector were more likely to terminate their pregnancy than those in the estate sector. Further, women residing in households where indoor smoking was permitted had a 13% greater chance of ending their pregnancy compared to non-smoking households. The study highlights the importance of restructuring education related to health and well-being, family planning, and work-life balancing for both women and their partners, and developing and implementing or strengthening policies and laws related to mitigating pregnancy termination including domestic violence for women.