Introduction: Pregnancies that occur in the first year postpartum are more likely to be unplanned and have adverse outcomes for the mother and baby. Modern contraceptive use during the first year postpartum has the potential to significantly decrease unplanned pregnancies and help to improve maternal and child health. Therefore addressing the extent and factors related to contraceptive utilization of women during extended postpartum period is essential. Objective: This study aimed to assess postpartum modern contraceptive utilization and associated factors among extended postpartum women in Gozamen district, East Gojam Zone, Northwest Ethiopia. Method: A Community based cross-sectional study was carried out on women who were in the first year after child birth. A total of 829 study participants were included using multistage sampling techniques. A structured and pretested questionnaire was used to collect data through face to face interview. Results: The prevalence of modern contraceptive was 46.7% among extended postpartum mothers. The most frequent used method was Injectable (68.2%). Urban residence (AOR=3.1, 95% CI: 1.14, 8.36), Educational status of the women (AOR=4.1, 95% CI: 1,16.9), Discussion with partner (AOR=3.04, 95% CI: 1.12, 8.23), Knowledge of modern contraceptive (AOR=16.01, 95% CI: 5.88, 43.56) and menses resumption (AOR=8.49, 95% CI: 5.04, 14.3) were factors found to be statistically significant. Conclusion: Current utilization of postpartum modern contraceptive method was unsatisfactory. Place of residence, educational level, partner involvement, knowledge of modern contraceptive and menses resumption were important determinants of contraceptive use.