Potential adverse drug event (PADE) is a medication error with the potential to cause associate degree injury however that does not cause any injury, either due to specific circumstances, chance, or as a result of the error being intercepted and corrected. This study aimed to assess the incidence, contributing factors, predictors, severity, and preventability of PADEs among hospitalized adult patients at Jimma Medical Center. A prospective observational study was conducted among hospitalized adult patients at a tertiary hospital in Ethiopia. Logistic regression was performed to identify factors predicting PADE occurrence. P-value < 0.05 was considered for statistical significance. A total of 319 patients were included. About 50.5% of them were females. The mean ± SD age of the participants was 43 ± 17.6 years. Ninety-four PADEs were identified. Number of medications (adjusted OR = 5.12; 95% CI: 2.01-13.05; p = 0.001), anticoagulants (adjusted OR = 2.51; 95% CI: 1.22-5.19; p = 0.013), anti-seizures (adjusted OR = 21.96; 95% CI: 6.57-73.39; p < 0.0001), anti-tuberculosis (adjusted OR = 2.2; 95% CI: 1.002-4.59, p = 0.049), and Elixhauser comorbidity Index ≤ 15 (adjusted OR = 6.24; 95% CI: 1.48-26.25, p = 0.013) were independent predictors of PADEs occurrence. About one-third of patients admitted to the hospital experienced PADEs.