Background: Compassion is the first ethical principle of health care to provide high quality cares which influences patient satisfaction, treatment adherence and outcome. But, there is a lack of studies examining the level and factors associated with compassionate mental health care practice in low-resource countries. Objective: To assess perceived compassionate care level and associated factors among patients with mental il ness at Tibebe Ghion specialized and Felege Hiwot comprehensive specialized hospital, North West, Ethiopia, 2022. Methods: An Institutional based cross sectional study design was conducted from June, 18 to July 18, 2022 at Bahir Dar city specialized hospitals. A systematic random sampling technique was used. Level of perceived compassionate care was assessed by the validated 12-item Schwartz Center Compassionate Care Scale® among 423 patients‘ with mental illness. Data were collected by Epicollect5 using smart phone and exported to Statistical Package for Social Sciences version 25 for analysis. Variables with P-value < 0.25 were considered as a candidate for the multivariate logistic regression analysis. The odds ratio with 95% confidence interval was used to show the strength of association. In-depth interview was conducted among 9 purposively selected participants. Results: The level of perceived compassionate care was found to be 47.5% (95% CI 42.6%-52.4%). The multivariate analysis showed that urban residence (AOR=1.90; 95%CI 1.08-3.36) duration of illness <24 months (AOR=2.68; 95% CI 1.27- 5.65), strong social support (AOR=4.43; 95%CI 2.16-9.10), high medication adherence (AOR=2.81, 95% CI 1.53-5.14), shared decision making, (AOR=3.93; 95% CI 2.27- 6.81), low perceived stigma(AOR=2.97; 95% CI 1.54-5.72) and low patient anticipated stigma (AOR=2.92; 95% CI 1.56-5.48) were positively associated with good compassionate care. Conclusion and Recommendation: Less than half of the patients had got good compassionate care. This implies that compassionate health care needs high attention as it is essential for quality health service. Key words: Compassionate care, Patients, Specialized hospitals, Ethiopia