Background Globally, ostomy creation rates are rising. Stomas, while life-saving, pose significant challenges. Nurses are vital in providing care and support to stoma patients. However, ostomy care practice and knowledge among Ethiopian nurses remain understudied. This study aimed to assess these aspects among nurses in Bahir Dar City, Ethiopia, in 2022. Methods An institutional-based cross-sectional study was conducted in three public hospitals in Bahir Dar City from September 19 to September 30, 2022. A simple random sampling technique was used to select 423 nurses. Binary logistic regression analysis was employed to identify associated factors toward dependent variables by considering p-value <0.05 to be statistically significant. Result From the total samples, 382(90.3%) responded to the questionnaire. The overall good knowledge and practice level of nurses regarding ostomy care was 55.2% and 52.1%, respectively. Taking ostomy care training {AOR = 2.44; 95% CI (1.29, 4.61)} and high level of a monthly income of study participants {AOR = 2.90; 95% CI (1.72, 4.91)} had a significant association with knowledge of ostomy care. On the other hand, taking courses on ostomy care {AOR = 1.76; 95% CI (1.06, 2.93)}, receiving training on ostomy care {AOR = 4.15; 95% CI (2.12, 8.09)} and good knowledge level on ostomy care {AOR = 2.13; 95% CI (1.32, 3.45)} were significantly associated with expressed practice of ostomy care. Conclusion The study found that only half of nurses exhibit good knowledge and practice in ostomy care. Training and monthly income significantly influence nurses’ knowledge, while practice level is associated with training, course attendance, and knowledge. These findings highlight the importance of targeted training programs and education initiatives to enhance nurses’ competence in ostomy care. It is also crucial to address factors like nurses’ income levels to ensure equitable access to educational resources and opportunities for professional development, thus enhancing their knowledge.