Background: Pregnancy and childbirth remain serious life threatening events for women in low income countries. Reducing maternal morbidity and mortality is a global priority health problem. One of the key strategies for reducing maternal morbidity and mortality is increasing institutional delivery service utilization of pregnant women under the care of skilled birth attendants. Therefore, the aim of this study was to assess the delays in utilizing institutional delivery service and its determinants among women who gave birth at public health institutions in Yem Special Woreda, Southwest Ethiopia. Methods: Health institution based cross-sectional study was conducted in Yem Special Woreda, Southwest Ethiopia. A simple random sampling technique supplemented with Focus Group Discussion was used. Data was collected using pretested structured questionnaires. SPSS version 20.0 was used for Bivariate and Multivariate Analysis. Results: The prevalence of delays in delivery service utilization was 76.3%. The mean time delay to utilize institutional delivery service was 5 (+3.08) hours. Low educational status of women (AOR=1.9, 95% CI: 1.09, 3.47), Parity (AOR=2.9, 95% CI: 1.57, 5.44) and Husbands decision (AOR=2.08, 95% CI: 1.09, 3.95) were found to be significantly associated with delay to utilize institutional delivery services. Conclusion: Low educational status of women, parity, not being ready to give birth in health facility and husband’s decision making were found to be determinants of delay to utilize institutional delivery services.