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Clinical laboratory services are essential for accurate diagnosis and effective disease management. However, many developing countries operate poorly, with persistent technical and administrative barriers. The results create challenges including misdiagnosis, inappropriate clinical decisions, increased patient morbidity and unnecessary healthcare costs. Despite the expansion of comprehensive specialized hospitals in Ethiopia, evidence on the specific technical and administrative determinants of quality laboratory services are limited. This study aimed to identify key determinants affecting the quality of laboratory services in government comprehensive specialized hospitals in Northwest Ethiopia. An institution-based cross-sectional study was conducted from May to July 2023 in comprehensive specialized hospitals in Northwest Ethiopia. Data were collected using a pretested self-administered questionnaire and observation checklist. Quantitative data were analysed using descriptive statistics and multivariable logistic regression in STATA version 14.1, with statistical significance set at P < 0.05. A standardized checklist was used to assess technical determinants (workflow organization, equipment reliability and maintenance, service continuity and power stability) and administrative determinants (quality management, adherence to standard operating procedures, documentation, turnaround time, quality assurance, inventory control, feedback mechanisms and staff training). Amongst 306 laboratory professionals from 5 comprehensive specialized hospitals, the overall quality of laboratory services was 51.6% (95% CI 46.01–57.22). Higher quality was independently associated with effective physician communication (AOR = 2.91), access to continuing professional education (AOR = 2.67), refresher training (AOR = 3.99), adequate laboratory equipment (AOR = 3.50) and sufficient staffing (AOR = 3.75). Observation of 30 laboratory rooms revealed major technical and administrative gaps, including inadequate equipment, poor maintenance, limited training, weak documentation and inconsistent standard procedures. Laboratory services in government comprehensive specialized hospitals were suboptimal, with gaps in laboratory–physician communication, staff training, equipment and staffing, potentially causing misdiagnosis, suboptimal clinical decisions, increased patient morbidity and unnecessary healthcare costs.