The aim of the present study was estimate the magnitude and assesses associated risk factors with under nutrition among Preschool children at selected Hawassa City, South Ethiopia. A community based cross-sectional study was employed in Hawassa from February to March 2012.Weight and heights of the selected children were measured and the socio-demographic characteristics of the subjects were collected using a structured interviewed questionnaire. After standardizing Preschool children weight and height using the new 2006 WHO child growth standard, a cut-off of two standard deviations below the mean defined the prevalence of stunting (length-for-age<-2),underweight(weight-for-age<-2)and wasting (weight-for-length <-2).Logistic regression analyses were performed to identify predictors of malnutrition. Out of 358 participants (50.6%) were girls while (49.4%) were boys with mean (±SD) age were 48.8±9 months. The overall prevalence of malnutrition in the community was high with 43.6% of the children being underweight (53.1%) stunted and (28.2%) wasted. Prevalence of severe stunting, underweight and wasting were 2.50%, 0.30% and 0.80% respectively. The children with age group 36-47 months were 2.9 times more likely to be wasted when compared to children from age group 48-60 months (AOR = 2.87 [95% CI: 1.73-4.77]. The study participants who were categorized in the low socioeconomic status tertiles were 4.4 times more likely to be wasted as compared to the high socioeconomic status tertiles AOR = 4.41 [95% CI: 2.94-8.45]. There was a high prevalence of under nutrition in the study area. The nutritional status (Wasted) of children in Hawassa was affected by low socioeconomic status and early age of child (36-47months). Thus, to improve nutritional status of children the full implementation of the poverty alleviation programmes should be considered and appropriate measures need to be taken to support needy families with children.