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Background: Institutional delivery is an important indicator in monitoring the progress towards Sustainable Development Goal 3.1 to reduce the global maternal mortality ratio to less than 70 per 100,000 live births. Despite the international focus on reducing maternal mortality, progress has been low, particularly in Sub-Saharan Africa (SSA), with more than 295,000 mothers still dying during pregnancy and childbirth every year. Institutional delivery has been varied across and within the country. Therefore, this study aimed to investigate the individual and community level determinants, and spatial distribution of institutional delivery in Ethiopia. Methods: A secondary data analysis was done based on the 2016 Ethiopian Demographic and Health Survey (EDHS) data. A total weighted sample of 11,022 women was included in this study. For spatial analysis, ArcGIS version 10.6 statistical software was used to explore the spatial distribution of institutional delivery, and SaTScan version 9.6 software was used to identify significant hotspot areas of institutional delivery. For the determinants, a multilevel binary logistic regression analysis was fitted to take to account the hierarchical nature of EDHS data. The Intra-class Correlation Coefficient (ICC), Median Odds Ratio (MOR), Proportional Change in Variance (PCV), and deviance (-2LL) were used for model comparison and for checking model fitness. Variables with p-values<0.2 in the bi-variable analysis were fitted in the multivariable multilevel model. Adjusted Odds Ratio (AOR) with a 95% Confidence Interval (CI) were used to declare significant determinant of institutional delivery. Results: The spatial analysis showed that the spatial distribution of institutional delivery was significantly varied across the country [global Moran's I = 0.04 (p<0.05)]. The SaTScan analysis identified significant hotspot areas of poor institutional delivery in Harari, south Oromia and most parts of Somali regions. In the multivariable multilevel analysis; having 2–4 births (AOR = 0.48; 95% CI: 0.34–0.68) and >4 births (AOR = 0.48; 95% CI: 0.32–0.74), preceding birth interval ≥ 48 months (AOR = 1.51; 95% CI: 1.03–2.20), being poorer (AOR = 1.59; 95% CI: 1.10–2.30) and richest wealth status (AOR = 2.44; 95% CI: 1.54–3.87), having primary education (AOR = 1.47; 95% CI: 1.16–1.87), secondary and higher education (AOR = 3.44; 95% CI: 2.19–5.42), having 1–3 ANC visits (AOR = 3.88; 95% CI: 2.77–5.43) and >4 ANC visits (AOR = 6.53; 95% CI: 4.69–9.10) were significant individual-level determinants of institutional delivery while being living in Addis Ababa city (AOR = 3.13; 95% CI: 1.77–5.55), higher community media exposure (AOR = 2.01; 95% CI: 1.44–2.79) and being living in urban area (AOR = 4.70; 95% CI: 2.70–8.01) were significant community-level determinants of institutional delivery. Conclusions: Institutional delivery was low in Ethiopia. The spatial distribution of institutional delivery was significantly varied across the country. Residence, region, maternal education, wealth status, ANC visit, preceding birth interval, and community media exposure were found to be significant determinants of institutional delivery. Therefore, public health interventions should be designed in the hotspot areas where institutional delivery was low to reduce maternal and newborn mortality by enhancing maternal education, ANC visit, and community media exposure. [ABSTRACT FROM AUTHOR]