Family planning coverage has improved in Ethiopia in the last decade, though fertility is still about 5.8 in the rural setup. In this paper, the major structural determinants of family planning service were analyzed using a multilevel model from 8906 individual women observation in the 2011 EDHS data. The results show that there is a big variation in family planning use both at the individual and between group levels. More than 39% of the variation in FP use is explained by contextual cluster level differences. Most of the socioeconomic predictors; respondent’s education, ethnicity, and partners’ education as well as employment status and urbanization were found to be significant factors that affect FP use. Similarly health extension visit and media access were found to be strong factors that affect FP service at both individual and cluster levels. This evidence concludes that addressing these contextual factors is very crucial to strengthen FP use and fertility reduction in the nation, beyond individual behavioral changes.