Objective To examine the prevalence of cutaneous disorders in children under 5 years old who attended a rural hospital in Southern Ethiopia. Methods A prospective cross-sectional study was conducted from January 26 to February 20, 2015 in children under 5 years old who attended Gambo Rural Hospital in West Arsi of the Oromia Region, Ethiopia. Results A total of 324 children were included (59.6% male) whose median age was 16.4 months. In total, 147 children [45.4%; 95% confidence interval (CI): 40.0%–50.8%] under 5 years had a skin problem, of which 101 (68.7%) consulted for that reason. The other 46 (31.3%) consulted for a general health problem and the dermatological condition was a secondary finding during the physical exploration. In 93 children (28.7%; 95% CI: 20%–33.8%), it was the main disease, and in 54 children (16.5%; 95% CI: 13.0%–21.1%) it was concomitant with other diseases. The most common dermatological disease was scabies (n = 44, 13.6%; 95% CI: 10.3%–17.7%). Impetigo was diagnosed in 32 children (9.9%; 95% CI: 7.1%–13.3%), of which 23 (71.9%) had complicated impetigo. Nineteen children (5.9%; 95% CI: 3.8%–9.0%) had eczema, 10 (3.1%) had eczema associated to other conditions. The following most frequent skin problems were tinea (n = 9; 2.8%), infected wound and ulcer (n = 7; 2.2%), and burns (n = 6; 1.9%). Conclusions Skin problems, mainly scabies, impetigo, and eczema were common in young children attended at a rural hospital in Southern Ethiopia. Children under 5 years should be examined thoroughly to rule out skin diseases, especially scabies.