Background. Globally, about 47.4% of children under five are suffering from anemia. In Ethiopia, 60.9% of children under two years are suffering from anemia. Anemia during infancy and young childhood period is associated with poor health and impaired cognitive development, leading to reduced academic achievement and earnings potential in their adulthood life. However, there is scarcity of information showing the magnitude of iron deficiency anemia among young children in Ethiopia. Therefore, this study aimed at assessing prevalence and associated factors of iron deficiency anemia among children under two (6–23 months). Methods. Institution based cross-sectional study was carried out from March to May, 2014, at Tsitsika Health Center in Wag-Himra Zone, Northeast Ethiopia. Systematic random sampling technique was employed. Automated hemoglobin machine was used to determine the hemoglobin level. Socioeconomic and demographic data were collected by using a pretested and structured questionnaire. Binary logistic regression analysis was used to identify associated factors and odds ratio with 95% CI was computed to assess the strength of association. Results. Total of 347 children participated in this study. The overall prevalence of anemia was 66.6%. In multivariate logistic regression analysis, male sex (AOR = 3.1 (95% CI: 1.60–5.81)), 9–11 months of age (AOR = 9.6 (95% CI: 3.61–25.47)), poor dietary diversity (AOR = 3.2 (95% CI: 1.35–7.38)), stunting (AOR = 2.7 (95% CI: 1.20–6.05)), diarrhea (AOR = 4.9 (1.63–14.59)), no formal education (AOR = 2.6 (95% CI: 1.26–5.27)), early initiation of complementary food (AOR = 11.1 (95% CI: 4.08–30.31)), and lowest wealth quintile (AOR = 3.0 (95% CI: 1.01–8.88)) were significantly associated with anemia. Conclusion. The overall prevalence of anemia among children who aged 6–23 months has sever public health importance in the study area. Integrated efforts need to be prioritized to improve health as well as appropriate infant and young child feeding practice among children under.