Objectives We assess the extent to which the use of healthcare facilities for childbirth varies by parity, conditional on socio-economic, psychological and health characteristics. We also assess differences in the determinants of institutionalized delivery for first-time mothers and multiparous, and explore village-level variations in observed relationships. Methods Survey data from a three-stage cross-sectional cluster sample of 1205 women from a rural district of Tanzania were analysed using random-intercept multilevel models. Results Use of health facilities for delivery was low (39%), with odds of institutionalized delivery three times higher among nulliparous women (0 children prior to current delivery) compared with women with one to four children; and 30% lower among women with five or more children compared with those with one to four children. In parity group analyses, women with at least some education and women with more than three antenatal care visits had higher odds of institutionalized delivery among nulliparous. Belief in the importance of institutionalized delivery increased the odds of delivering in a facility among multiparous women; so did health insurance for women with five or more children. We found a significant variation in institutionalized delivery among multiparous women based on their village of residence (one to four and five or more children), but these variations were not observed among nulliparous women. Conclusion Parity is a pivotal determinant of the use of health facilities for delivery, and its significance varies by village of residence; hence, interventions targeting women according to parity may increase the use of facilities for delivery in rural Tanzania. Future research should focus on the village-level characteristics that influence institutionalized delivery in multiparous.