Background: Community based health insurance scheme is an emerging strategy for providing financial risk protection against health-related poverty. Household satisfaction with the insurance scheme is more likely to affect their decision to remain enrolled and entrance of new members as well. However, studies focusing on households’ satisfaction on the community based health insurance scheme and factors associated with it are generally scarce in Ethiopia, and it has not been studied at all in the study area. Objective: To determine level of satisfaction with community based health insurance scheme and associated factors among heads of households in Bibugn district, Northwest Ethiopia, 2021. Method: A community based cross-sectional study was conducted in households of Bibugn district from March 1-30, 2021. Systematic random sampling technique under multi-stage sampling was used to select study participants. A face to face interview on a total of 604 households was conducted by using pre-tested structured questionnaire. Descriptive analysis, bivariable and multivariable logistic regression analysis was conducted. Variables with p-value<0.2 were included in multivariable logistic regression. Hosmer and Lemeshow goodness of fit test was checked for model fitness and found p=0.292. P-value of < 0.05 was considered as statistically significant to determine independent predictors of household satisfaction. Result: The level of household’s satisfaction with CBHI scheme was found to be 56.1%. Satisfaction was found significantly associated with old age(AOR=1.85; 95% C.I 1.17-2.94), rural residence(AOR=4.13; 95% C.I 2.24-7.62), visit to health center only (AOR=0.34; 95% C.I 0.20-0.55), <5km distance to health facility(AOR=3.18; 95% C.I 1.82-5.55), agreement with prescribed drugs(AOR=2.31; 95% C.I 1.36-3.92), healthcare providers friendliness(AOR=3.65; 95% C.I 2.18-6.10) and good knowledge of benefit packages(AOR=3.00; 95% C.I 1.93-4.67). Conclusion: This study showed that the overall satisfaction of households in Bibugn district with the CBHI scheme was good. Old age, rural residence, type of health facility visited, <5km distance to health facilities, friendliness of health care providers, agreement with prescribed drugs, and good knowledge of CBHI benefit packages were found to be significant predictors of satisfaction. Consideration should be given for increasing accessibility of health care facilities, improving Compassionate, Respectful and Caring (CRC) practice, improving quality of health care providers and improving enrollee’s knowledge of CBHI benefit packages