Almost half of under-five children were determined to be underweight. Gender inequality, socioeconomic and cultural backgrounds, the number of childbirths, and inadequate knowledge of the parents had a greater impact on children’s nutritional status. This study’s core aims were to identify socioeconomic and demographic factors and variations in the severity of being underweight among under-five children in Ethiopia. Nine thousand thirteen children under 5 years of age were included for the study. Cross-sectional variables were collected from respondents. The study data has level 2 hierarchical data with 9013 under-five children. The study revealed that about 25.3% of under-five children in Ethiopia were underweight (low weight for age z-score). The random intercept and fixed-effect models were found to be better models than the empty model and random coefficient (slope). Variations in under-five child underweight among Ethiopian regions were non-zero, predicting variation in under-five child underweight among Ethiopian regions. At a 5% significance level, sex, place of residence, the educational levels of mothers and their husbands, a diagnosis of diarrhea in the previous 2 weeks, the employment status of mothers, the age group of the child in months, if the child has a twin, birth order, breastfeeding status, size at birth, place of delivery, and the status of fortified baby food all had significant effects on being underweight among under-five children. There are significant variations in the prevalence of under-five children being underweight among the regions in Ethiopia.