Myanmar has a high proportion of out-of-pocket (OOP) health care expenditures with limited cost-sharing mechanisms. In Myanmar, there were limited data on the frequency of catastrophic health expenditure (CHE) due to OOP payments, as well as on the factors associated with CHE. This study aimed to investigate health care expenditure, the frequency of CHE, and the factors influencing CHE among households in Magway, Myanmar. A cross-sectional household survey was conducted in 2012 for 700 households (350 in urban areas and 350 in rural areas) in Magway. CHE was defined as a condition wherein the total amount of household health care expenditure was 40% or more of non-food expenditure in the past year. Multiple logistic regression analysis was applied to estimate odds ratios (ORs) and 95% confident intervals (CIs) of CHE. In the previous year, 28.3% of 350 urban households and 51.4% of 350 rural households utilized outpatient services. Households with at least one member admitted to a medical facility were 10.0% and 12.9%, respectively. Those with CHE were 25.2% in the urban areas and 22.7% in the rural areas. The adjusted OR of CHE was 7.79 (95% CI 3.73–16.26) for hospitalization and 1.08 (95% CI 0.36–3.23) for outpatient care, relative to no services used. These findings indicated that nearly one fourth of households in Magway faced CHE due to inpatient care. A safety-net mechanism to protect households from CHE in Myanmar seems essential.