Background: Hospitals in developing countries are often insufficient to meet the growing healthcare demands, causing significant overcrowding burden. Pulse oximetry can help alleviate these burdens, particularly in patient monitoring; however, its effectiveness is limited by several challenges. This study aimed to assess the challenges influencing its utilization in low-resource settings, with particular emphasis on the Ethiopian healthcare system. Methods: This study employed a mixed-methods approach, a convergent design that combines quantitative and qualitative data. The participants in this study were healthcare professionals who extensively used fingertip pulse oximeters in hospital settings. Quantitative data were analyzed using descriptive and inferential statistics, and qualitative data were examined through content analysis. Data were collected using an anonymous online questionnaire. Results: The major challenges were short battery life (64.1\%), sensor inaccuracy (13.9\%), infrastructure limitations (52.9\%), power consumption (84.8\%), and limited device access (17.5\%). Significant associations were found between major challenges and professional categories (p<0.001) and differences across hospital wards with varying infrastructure levels (p=0.002). Furthermore, the perceived usability scores of pulse oximeters between nurses and physicians (p=0.001). Qualitative findings further reinforced that these challenges significantly hinder effective patient monitoring. Conclusions: Pulse oximetry use faces substantial performance barriers in low-resource settings, limiting its ability to support effective clinical care. These findings may guide the design of future devices and improve implementation strategies in low-resource settings.