ABSTRACT Background: Oxygen is widely used to treat tissue hypoxia but is often misprescribed, causing poor monitoring and potential toxicity. Pediatric healthcare providers need proper knowledge and practice to improve patient safety and quality of care, and previous studies overlook recent advances, interdisciplinary approaches, and multiple professionals. Objective: To assess knowledge and practice of oxygen therapy among health professionals TibebeGhion Specialized Hospital, FelegeHiwot Compressive Specialized Hospital, and Addis Alem Primary Hospital in Northwest Ethiopia, 2025. Method: This institution-based cross-sectional study was conducted from July 1 to December 30, 2025, at TGSH, FHCSH, and Addis Alem Primary Hospital in Bahir Dar, Ethiopia. The study population comprised those directly involved in oxygen therapy. A final sample of 237 participants was determined using single and double population proportion formulas, with systematic random sampling applied proportionally across hospitals. Data were collected using a pretested, structured, self-administered questionnaire by trained nurses. Quality control measures included pretesting, supervision, and data verification. Data were entered into EpiData and analyzed in SPSS using descriptive, bivariate, and multivariable analyses. Result: This cross-sectional study in Bahir Dar public hospitals found that approximately half of health professionals demonstrated good knowledge (49.4%) and practice (48.1%). Good knowledge was significantly associated with being a resident (AOR = 3.05; 95% CI: 1.22–7.62). In addition, health professionals working in departments with oxygen therapy guidelines were more than twice as likely to have good knowledge compared with those without guidelines (AOR = 2.15, 95% CI: 1.11–4.16, p = 0.023). Conversely, limited years of service (AOR = 0.44; 95% CI: 0.23–0.83) were associated with poorer practice. Conclusion: About half of health professionals showed good knowledge and practice of oxygen therapy. Knowledge was higher among residents and guideline users, while practice improved with experience, highlighting the need for standardized protocols.