Background: Episiotomy is a surgical incision of the perineum during delivery to enlarge the vaginal orifice. It is one of the most commonly performed obstetric intervention world widely. The magnitude of episiotomy varies from population to population. Limited information exists related to the practice of episiotomy in Ethiopia. This study aimed to assess the prevalence of episiotomy and its associated factors in University of Gondar Comprehensive Specialized Referral Hospital, Ethiopia. Methods: Institution based retrospective cross-sectional study was undertaken from March to June 2014 on 306 mothers who had a vaginal delivery in the Hospital. Systematic random sampling technique was employed to select study units. The data were collected using pretested cheek list. Proportion of patients who had episiotomy was calculated and the association between dependent and independent variables was checked using both binary and multiple logistic regression and Chi-square. Results: Prevalence of episiotomy in University of Gondar Comprehensive specialized Referral Hospital was 47.7% (n = 146). Majority (89.5%) of the delivery was spontaneous vaginal delivery while vacuum, forceps and destructive delivery were 4.6%, 4.6%, and 1.3% respectively. During pregnancy and delivery, 84% of mothers had no associated diseases while 8% had hypertensive disorder, 5% diabetes mellitus and 3% of them has other diseases. After multivariate analysis episiotomy was significantly associated with maternal age (15-24 years) (p = 0.041, AOR (CI 95%) 1.65 (1.02 - 2.66)), primiparity (p =0.010, AOR (CI 95%) 2.61 (1.54 - 4.44)), prolonged labor (p = 0.001, COR (CI 95%) 6.45 (2.89 - 14.38)), and weight of newborn (p = 0.044, COR (CI 95%) 2.48 (1.16, 5.31)). Conclusion: Prevalence of episiotomies in the institution was 47.7% and variables that remained associated significantly with episiotomy were maternal age, primiparity, prolonged labor, and newborn weight.