Background: Donation of different medical equipment to developing nations from different international and multinational organizations has been currently increasing. Donation of medical equipment to developing countries account 80% of the total equipment in their facilities, more than 70% of the donated medical equipment found out of service in Sub-Saharan African countries. Hence, this study was conducted to assess the utility of donated medical equipment and associated factors in Jimma University specialized hospital as a base line research. Objectives: To asses utility of the donated medical equipment found in Jimma University Specialized Hospital. Method: An institution based descriptive cross-sectional study was carried out from March to April 2015, Data were analyzed using SPSS for windows version 16.0, Chi-Square test and binary logistic regression were used to determine the association between the different factors. Result: A total sample of 180 donated medical equipment was included in the study. The result showed 81(45%) were in utilization 99(55%) were found out of service. Availability of a local expert was one of the factors predicting utilization (OR, 1.997 with CI of 95% 1.3, 4.2). availability of spare parts in local market were also found to predict utilization (OR 1.1212 with 95% CI of 1.2,2.2). Equipment condition and availability of accessories on arrival to the facility were also found to predict utilization of the equipment. Conclusion: Majority of the equipment’s obtained by donation are found out of service. Lack of skilled professionals in the institution, absence of spare parts in domestic market, condition of the equipment on arrival, absence of maintenance manual and accessory along machine are the predictors for utilization of donated medical equipment for intended purpose.