Background. Diabetic nephropathy is real damage resulting from having uncontrolled diabetes mellitus. Unmanaged diabetic nephropathy is one of the most leading causes of kidney failure. There is a scarcity of information on the determinants of diabetic nephropathy among diabetes mellitus patients in Ethiopia. Identification of the determinants can help devise a strategy to properly address the disease and its consequences. Therefore, this study was designed to assess the determinants of diabetic nephropathy among diabetes mellitus patients. Methods. Unmatched case-control study design with 168 cases and 672 controls with a mean age of 45.18 and 62.12, respectively, participated in the study. An interviewer-administered questionnaire was employed for data collection, and a systematic sampling technique was used to select the study participants. Data were entered into Epi data and exported to SPSS for data clarification and analysis. Binary logistic regression analysis was carried out to check the level of association between diabetic nephropathy and the independent variables. Results. Comorbidity (AOR: 4.96 at 95 CI: 1.77–13.87), hypertension (AOR: 6.33, 95% CI: 2.51–16.02), poor glycemic control (AOR: 3.27, 95% CI: 1.31, 8.21), age (AOR: 1.14, 95%: 1.09–1.19), duration with diabetes mellitus since diagnosis (AOR: 1.83, 95 CI: 1.62–2.06), and nonadherence to diabetic medication (AOR: 3.3, 95% CI: 1.34, 8.15), diet (AOR: 5.96, 95%: 1.92–18.54), and exercise (AOR: 5.60, 95% CI: 1.94–16.21) were the determinants of diabetic nephropathy. Conclusion. Adherence to medication, diet, and exercise should be empowered to achieve glycemic control and to prevent diabetic nephropathy. More attention has to be also given for old aged diabetic patients, long duration since diagnosis of diabetes mellitus, hypertension, and other comorbidities.