Background: It is a fact that diarrheal diseases caused major public health problem in children under-five years of age, especially in developing countries like Ethiopia. Methods: Institutional based unmatched case-control study design was conducted. A case in this study was a child under-five years of age visited Kotebe health center for treatment and a control was a child under-five years of age without diarrhea that came to the center for vaccination and treatment of other cases. A face-to-face interview based on a pre-tested, structured questionnaire was conducted with mothers/ caretakers with trained nurses. Binary logistic regression analysis was used to measure the association between dependent and independent variables, calculating odds ratios and 95% confidence intervals. Statistical significance was set at α ≤ 0.05. Multivariable analyses were applied to identify the relative effect of explanatory variables on the dependent variable. Result: A total of 350 study subjects, including 117 cases and 233 controls, were recruited into the study. The study revealed that some factors remained independently associated with the risk of diarrhea, namely age of the children AOR (95%CI); 4.22 (1.36-13.14), maternal education AOR (95%CI); 0.33 (0.16-0.65), supplementary feeding commencing time AOR (95%CI); 0.30 (0.09-0.95) and hand washing after cleaning child bottom AOR (95%CI); 0.59 (0.35-0.99) with p-value ≤ 0.05. Conclusion: From this study, associated factors of diarrhea were identified. The finding is important for health intervention and supports the view that investing in girls’ education has substantial benefits on child health