Background: Most maternal deaths in the world occur during the postpartum period, especially within the first two days following delivery. This makes postnatal care (PNC) critical to improving the chances of maternal and child survival. Over the past 20 years, the proportion of women receiving antenatal care (ANC) in Ethiopia has increased while the proportion of those receiving PNC has remained low. This study aimed to understand the trends, determinants and urban–rural variations of PNC service utilisation. Methods: This study draws on the Ethiopian Demographic and Health Survey (EDHS) data for the years 2000 (n = 4552), 2005 (n = 4467), 2011 (n = 4445) and 2016 (n = 4275) to estimate the trends and determinants of PNC service utilisation. Multivariate logistic regression models with adjustment for clustering and sampling weights were used to investigate the association between the independent factors, the study factors and PNC service utilisation. Results: Over the twenty-year period of the EDHS, the proportion of Ethiopian women who received PNC services increased from 5.6% (95% CI: 4.6–6.9%) in 2000 to 18.5% (95% CI: 16.4–20.7%) in 2016. Similarly, women who received PNC services in urban areas increased from 15.2% (95% CI: 23.6–30.7%) in 2000 to 47% (95% CI: 60.4–67.3%) in 2016. Women who were in the wealthy quintile, had ANC visits, delivered in a health facility, and delivered by caesarean section were most likely to have PNC. The present study also showed that whilst birth spacing was a significant factor among urban women, wealth index, ANC visits, and perception of health facility distance were significant factors among rural women. Conclusions: The study suggests low levels of utilisation of PNC among Ethiopian women from rural districts. Geographically targeted interventions with a focus on low-socioeconomic rural women, and those with no previous contacts with the health system during pregnancy, are needed to improve PNC in Ethiopia.