Ethiopia is one of the developing countries where malnutrition and communicable diseases represent the major health problems. A community based cross sectional study was done in Adami-Tulu Woreda to determine and identify factors influencing nutritional status of children between 6 and 59 months of age in rural communities. The result showed a high prevalence of malnutrition. Out of 568 children who were involved in the study, 255 (44.9%) were well-nourished and 313 (55.1%) malnourished, 264 (43.3%) under-weight, 210 (37%) stunted and 103 (18.1%) wasted. The rates of sever and moderate malnutrition were highest when using weight-for-age scale. Age of the child, ethnicity, availability of latrine, family income, birth order, frequency of feeding and weaning age were significantly associated with nutritional status. As the prevalence of malnutrition among the children was found high and it is recommended that nutritional intervention aiming at altering the local factors be implemented all relevant social sectors in a coordinated way.