To meet the 2030 goal to end all types of malnutrition, thoroughly investigating and addressing context-specific factors of undernutrition is crucial. Therefore, this study assessed the prevalence of undernutrition and associated factors among children aged 6–23 months in South-East Ethiopia. A community-based cross-sectional study was conducted on 580 randomly sampled mother–child pairs in February 2022. Socio-demographic, dietary intake, household food security (HFS), maternal knowledge and practices of child feeding, and the child's weight and height data were collected. A multivariable logistic regression analysis was done. The prevalence of stunted, wasted, and underweight children was 32⋅1, 7, and 9 %, respectively. Being male (AOR = 1⋅75), not using the growth monitoring and promotion (GMP) service (AOR = 1⋅50), household food insecurity (HFI) (AOR = 1⋅67), lack of improved water (AOR = 2⋅26), and bottle-feeding (AOR = 1⋅54) were significantly associated with stunting. Being male (AOR = 3⋅02), having low maternal knowledge on child-feeding practices (AOR = 3⋅89), not listening to the radio/television (AOR = 3⋅69), having a history of fever (AOR = 3⋅39), bottle-feeding (AOR = 3⋅58), and HFI (AOR = 3⋅77) were significantly predicted wasting. Being male (AOR = 3⋅44), not using GMP service (AOR = 2⋅00), having a history of fever (AOR = 4⋅24), lack of knowledge on optimal breastfeeding duration (AOR = 3⋅58), low maternal knowledge on child feeding (AOR = 2⋅21), HFI (AOR = 2⋅04), and lack of improved water (AOR = 3⋅00) showed significant association with underweight. In conclusion, stunting is alarmingly common while wasting and underweight are sub-optimal. Prevention of infectious disease, providing basic education for fathers, ensuring HFS; enhancing media access, maternal knowledge about IYCFP and improving water access; and GMP service utilisation are crucial to improve child nutrition.