Background: Sleep problems pose global public health concerns, particularly among nurses, with approximately two-thirds experiencing sleep disturbances and fatigue. Although poor sleep hygiene and fatigue can impair nurses’ performance and alertness, increasing work-related accidents, chronic diseases, absenteeism, burnout, and medical errors, ultimately threatening both nurses’ well-being and patient safety, no studies have been conducted on this population in Ethiopia. This study assesses sleep hygiene practices and perceived fatigue, examine the associations between poor sleep hygiene and excessive fatigue, and risk factors among nurses. Methods: An institutional-based cross-sectional study was conducted among 424 nurses via simple random sampling. Data collected using self-administered Sleep Hygiene Index (SHI), Chalder Fatigue Scale (CFS), and Pittsburgh Sleep Quality Index (PSQI) questionnaires analyzed with SPSS Version 26.0. Bivariate, multivariate, and Pearson correlation analyses were performed to identify associations and risk factors. Results: Among the 424 sampled nurses, 412 participated, yielding a response rate of 97.2%. The prevalence of poor sleep hygiene practices, and perceived fatigue among nurses was 52.3%, and 89.3%, respectively. A significant positive correlation was found between poor sleep hygiene and fatigue (r = 0.67, P < 0.001), poor sleep hygiene practices were associated with higher fatigue levels. Experiencing burnout syndrome (AOR = 4.51, 95% CI: 2.60, 8.05), depression (AOR = 2.52, 95% CI: 1.53, 4.09), current alcohol drinkers (AOR = 1.95, 95% CI: 1.25, 3.08), shift work sleep disorders (AOR = 2.03, 95% CI: 1.17, 3.82), poor sleep quality (AOR=5.04,95% CI:2.33,9.52) , and job-related stress (AOR = 3.54, 95% CI: 1.76-6.98) were risk factors. Conclusions: The findings indicate that over half of nurses working in comprehensive specialized hospitals had poor sleep hygiene, and highly experienced perceived fatigue. A significant positive correlation was found between poor sleep hygiene practices and fatigue. Thus, promoting good sleep habits to manage and prevent fatigue among nurses are crucial.