Introduction: Institutional delivery has been considered as one of the important strategies to improve maternal and child health, and significantly reduces birth related complications however it is still low in developing countries though there are some improvements. Hence, the aim of this study was to assess the prevalence of institutional delivery service utilization and associated factors among women who gave birth in Central Gondar zone, North West Ethiopia. Methods: A community-based cross-sectional study was conducted from September to December 2019. A multistage systematic sampling technique was used to select a total of 1,394 study participants. Data were collected from women who gave birth during the past one year by using structured and pretested questionnaire. Binary logistic regression was performed to identify factors at 95% confidence level. Results: The prevalence of institutional delivery service utilization was 58.17 % (95%CI: 55.57%, 60.77%). Multivariable logistic regression showed that women age ( ≥35years) (AOR= 1.43; 95% CI 1.04,1.96), having a family size of less than five (AOR= 4.61; 95% CI 3.34,6.34), husbands educational status of primary school (AOR= 1.64; 95% CI 1.19,2.24), middle level household wealth index (AOR= 1.78; 95% CI 1.25,2.54), rich level household wealth index (AOR= 2.01; 95% CI 1.42,2.86), having family discussion (AOR= 4.05; 95% CI 2.74,5.97), antenatal care visit during their recent pregnancy (AOR= 1.86;95% CI 1.16,2.97),distance from the nearby clinic(≤30min) (AOR= 2.92; 95% CI 1.53,5.58), decision power about place of delivery (AOR= 2.50; 95% CI 1.56,4.01) and bad behavior of health workers (AOR= 0.27; 95% CI 0.19,0.39) were significantly associated with utilization of institutional delivery service. Conclusion: Institutional delivery service utilization was low in the study area. Women age (≥35years), having a family size of less than five, educational status of husband (primary), household wealth index (middle and rich), family discussion, antenatal care visit, distance from the nearby clinic (≤30min), decision power about place of delivery and bad behavior of health workers were predictors of institutional delivery. This study implies that strengthening family discussion and up taking antenatal Care services in regular ways are few of the suggested recommendations.