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Abstract Background Infants are in a state of rapid development and maturation; the growth rate is most rapid during the first 4 to 6 months of life. Few studies indicated that in developing countries including Ethiopia the prevalence and duration of breastfeeding is declining and being replaced by formula milk. Therefore, this study aimed to assess the formula-feeding practice and its associated factors among urban and rural mothers with infants 0–6 months of age in the Jimma Zone, Western Ethiopia. Methods A community-based cross-sectional study was conducted from November 7, 2015, to January 10, 2016, in the Jimma Zone. The quantitative data were collected from a sample of 714 respondents using a multistage sampling technique. Data were collected through a structured questionnaire and the multivariate logistic regression model was used to show predictors of the formula-feeding practice among mothers with infants 0–6 months of age. Result The proportion of mothers who feed their baby formula-based was 47.2%, of which 34.5% were living in rural areas and 65.5% were living in urban areas. Among the mothers living in urban areas, the likelihood of formula-feeding was significantly associated with maternal educational status and attitude towards formula-feeding. On the other hand, being attended by relatives/friends and the traditional birth attendant was significantly associated with the formula-feeding practice among mothers who live in rural areas. Conclusion Nearly half of the mothers in the study area practice formula-feeding for their infant. Therefore, sustained community based nutritional health education is recommended for pregnant and lactating mothers to reduce the practice of formula-feeding for infants.