Background: Employee engagement is the commitment and passion for one’s work and role within an organization. An engaged employee can have a significant effect on financial and operational results of an organization. Employee engagement remains a vital issue worldwide, known problem in human resource to be studied. A global employee engagement survey indicated that for Middle East and North Africa and for sub-Saharan regions, the level of employee engagement at work place is only 10%, which is very low as compared with the USA and Canada which as 29% . Different studies were carried out in banks, industries and educational institutions and therefore the researcher will examine the existing gap on employee engagement with a focus on the health sector which is important. This study identified some factors influencing employee engagement in Bahir Dar Branch EPSA and draws some conclusions. Objective: The objective of the study was to identify magnitude and factors influencing employee engagement in Bahir Dar branch Ethiopian pharmaceutical supply agency. Methods: The study was conducted in Bahir Dar branch Ethiopian pharmaceutical supply agency in Bahir Dar city with cross-sectional study design. The researcher conducted census which is 156 employees because the total population is small and data was collected by using self-administered questionnaire. Descriptive analysis was conducted for variables such as gender, age, educational level, work experience, etc. Mean was also computed to determine the magnitude of employee engagement. Then, ordinal logistic regression analysis was conducted to understand how much will the dependent variable change, when the independent variables are changed. Odds ratio was used as a parameter to determine the strength of association between independent variables and dependent variable. Results: A total of 156 respondents were expected to fill the questionnaire but 144 (a response rate of 92%) were filled up and returned the questionnaire. The magnitude of employee engagement was 3.1620. In Ethiopian pharmaceutical supply agency Bahir Dar branch 55.6% of the employees are engaged. There is no significant difference in the magnitude of employee engagement between male and female employees. The odds of being in a higher level on employee engagement increases by a factor of 1.425 for every one unit increase on internal locus of control given all of the other variables in the model are held constant. Conclusion: The magnitude of employee engagement was low when compared to Gallup study. Internal locus of control is the main factor that influences employee engagement, the branch need to modify their employee internal locus of control aligned with their organization objective. Key words: Ethiopian pharmaceutical supply agency, internal locus of control, communication, leadership, organizational support, supervisors support, reward and recognition, working environment, employee engagement.