Recently, Ethiopia has registered significant reduction of infant and under-five mortality rates. However, the gains in improved health outcomes are uneven across regions of the country. Using panel data models, the article finds that inter-regional disparities in infant and child mortality rates are strongly associated with factors within and beyond the health sector. In particular, the results suggest that infant mortality rate is negatively related with real per capita public health expenditure, urbanisation and health extension programme. On the other hand, the number of hospital beds and primary school gross enrolment significantly decrease under-five mortality rate. The article draws some initial policy implications. Copyright © 2011 John Wiley & Sons, Ltd.