Diarrheal disease is the most common cause of illness and the second leading cause of child death in the world. The burden is greatest in the developing world including Ethiopia. The purpose of this study has been to identify socio-economic, demographic, environmental and nutrition proximate predictors that affecting diarrheal morbidity of under-five children in Ethiopia. In this research data from the Ethiopian Demographic and Health Survey conducted in 2011 was used. Multiple and multilevel binary logistic regressions were employed for data analysis. The prevalence of diarrhea, stunting, wasting, and underweight among under-five children were 15.6%, 37%, 10.2% and 35.3% respectively. Both in multiple binary logistic regression and multilevel logistic regression, it was found that age of child, maternal working status, duration of breast feeding, stunting, wasting, and underweight were significant determinants of childhood diarrhea. From multilevel logistic regression, it was found that the random intercept and fixed coefficients model provided the best fit for the data under consideration. The variance of the random component related to the intercept term was found to be statistically significant implying differences in prevalence of diarrhea among the regions. However, the significant predictors did not show underlying variation from region to region. Therefore, the concerned body should give implement on nutritional intervention activities at all level of the community and Efforts should be invested to educate parents about the importance of breastfeeding and initiate to adopt the culture of breastfeeding their children to reduce the exposure of children to diarrhea. Researchers should use multilevel models than traditional regression methods when their data structure is hierarchal as like in EDHS data.