Background: Maternal mortality is unacceptably high. Most maternal deaths are avoidable, as the health-care solutions to prevent or manage complications are well known. An important component of efforts to reduce health risks to mothers and children is increasing the proportion of babies that are delivered in health facilities. Ethiopia has one of the highest home delivery practices, as the 2011 EDHS report shows home delivery prevalence was 90%. To improve maternal health, barriers that limit utilization and access to delivery services must be identified and addressed. Objectives: The objective of the study is to asses factors associated with institutional delivery among mothers in the Butajera Demographic and Surveillance System. Method: A community based case control study supplemented with a qualitative study was conducted to identify factors associated with utilization of institutional delivery. The study was done using the Butajera demographic surveillance system. Women who have given birth in health institution in the past one year was considered as Cases while the controls were women who have given birth at home in the past one year. The quantitative data was collected using a pre-tested and structured questionnaire and four FGDs and four in-depth interviews were done using interview guide. To assess the association, bivariate analysis was done. All independent variables with p-value less than 0.05 were included in the final multivariate logistic regression model. Result: The final multivariate regression model has shown that the main determinant factors of utilization institutional delivery service are age of mother, residence at the time of delivery, place of previous deliveries, decision maker about place of delivery and history of health problem during last delivery. While being young in age and history of health problem increased utilization of IDS, residing in rural area was found to be preventive of utilization of IDS. In addition both mothers who have all their deliveries in health institution and those who have all their deliveries in their home will follow the same pattern as their previous experience. The qualitative part of this study has shown that mothers are not convinced about the services and the health professionals in health institutions. Conclusion: In conclusion, mothers in urban areas, who never used IDS and older at age were found less probable to use IDS, hence due attention should be given to this group of women to improve utilization. The government and health professionals should educate mothers and advocate delivery service in order to change the outlook of the community towards IDS.