BACKGROUND:Anemia is a major public health problem among pregnant women in developing countries like Ethiopia. Nutritional deficiency related to anemia is an important contributor to maternal mortality and poor fetal outcomes. METHODS: Institution based cross-sectional study was conducted among pregnant women to assess the prevalence of anemia and its association with dietary diversity in Hossana Town from March 15 to April 30, 2017. Systematic random sampling procedure was employed to select 314 study subjects. Data were collected using an interviewer administered semi-structured questionnaire supplemented with laboratory tests. Multivariable logistic regression was used to determine the independent predictors of anemia. RESULTS: The prevalence of mild to moderate anemia among pregnant women was 56.6% and 40.8% respectively. The mean dietary diversity and food variety score of study participants were 7 and 22 respectively. Maternal education (AOR=10.5; 95% CI:2.2, 27), occupation of spouse (AOR=9.3; 95% CI:1.6, 53), nutrition education (AOR=2.5; 95% CI:1.5, 6.4) and dietary diversity (AOR=18.6; 95% CI: 4.4, 28) were significantly associated with anemia. CONCLUSION:  Anemia was found to be a moderate public health problem in Hossana Town. Therefore, there is a need of nutrition education and promotion awareness on healthy diets to prevent anemia among pregnant women.   KEYWORDS: Dietary Diversity, Food Variety, Anemia, Pregnant Women