Attempts to predict pregnancy and childbirth complications before they occur have not been successful. Provision of safe delivery service for all births is considered to be a critical intervention for ensuring safe motherhood. Hence the aim of the study was to assess factors associated with safe delivery service utilization among women in Sheka Zone South West Ethiopia. A community based comparative cross sectional survey was conducted among 554 women in Sheka Zone from February to March 2008. Data were collected through structured pre-tested questionnaire and entered into Epinfo version 3.3. Analyses were done with SPSS version 13 computer software with which bivariate and multiple logistic regressions were carried out. Mothers who completed at least secondary school were more likely to give birth at health facility than those uneducated (AOR = 3.26, 95 % CI 1.51–7.06). Women with birth order above four were less likely to give birth in a health facility than those with first order births (AOR = 0.21, 95 %CI 0.10–0.43). Women who had encountered problems in their immediate birth and received prenatal care were more likely to give birth at health facilities AOR = 33.78 95 % CI 16.44–69.39) and (AOR = 2.55, 95 % CI 1.05–6.21) respectively. Factors associated with safe delivery service utilization are related to the women’s socioeconomic status and obstetric experiences. Consequently promotion of maternal education, prenatal care utilization, information education and communication on obstetric risks and general health service expansion are needed to ensure safe delivery service.