ObjectivesThis study aimed to assess factors associated with institutional delivery among mothers who had delivered within 1 year prior to the study at Gilgelbelles town, Northwest, Ethiopia.DesignA community-based mixed-methods study was conducted from 1 February 2020 to 2 March 2020.SettingThis study was conducted at Gilgelbelles town, Northwest Ethiopia.ParticipantsIncluded 422 mothers who delivered 1 year prior to the study at Gilgelbelles town.Outcome measuresUtilisation of institutional delivery and factors associated with institutional delivery.MethodsThe quantitative data were collected by the simple random sampling technique, entered into Epi data V.3.1, and analysed using SPSS V.23.0. The qualitative data were collected by using in-depth interviews and thematic analysis was done manually to supplement the quantitative result.ResultsIn this study, 39.6% (95% CI=34.8 to 44.3) of mothers were given childbirth at the health facility. In multivariable analysis maternal age group of 15–20 years, secondary and above educational level, good knowledge on danger signs of obstetric, antenatal care visits, good awareness of birth preparedness and complications readiness plan, getting married after the age of 18 years, faced at least one complication during pregnancy, less than two children, travelled <30 min to reach a nearby health facility, having decision making power and not practised traditional malpractice during labour were significantly associated with institutional delivery. The qualitative result shows that cultural factors of the society and the lack of adequate delivery material in the health facility were identified as the major reason for the low utilisation of institutional delivery services.ConclusionThis study showed that the proportion of institutional delivery was low. Sociodemographic, reproductive and knowledge-related factors were associated with institutional delivery. This indicates a need of taking appropriate interventions by integrating other stakeholders to increase the utilisation of institutional delivery services.