Groundwater resource is the most important natural resource in the study area. Thernrapidly increasing agriculture, industry and domestic water supply requirements in thernstudy area meet mainly from groundwater. Groundwater is usually protected againstrncontamination from the surface by soils and covering rock layers. This why mostrndrinking water in many areas of the world is groundwater.rnDue to steep increase in population along with the associated activities, the water demandrnfor groundwater in the study area is maximized from time to time. However, water can bernconstraint if not properly managed and developed. Even though the water supplyrncoverage of the study area is increases, a significant number of the water supply schemesrnin the catchment are non functional due to different reasons, which implies that norneffective system of groundwater management practices in the area.rnThe main objective of the present study is to evaluate the groundwater potential of GilgelrnAbay catchment and to assess management issues in the catchment. To achieve thisrnobjective recharge to the groundwater was estimated based soil-water balance methodrnand a value of approximately 489mm annual recharge to the catchments’ aquifer wasrnobtained. In the catchment two aquifer systems were identified based the available wellrnlog data and pumping test data namely: Quaternary vesicular basalt and Tertiaryrnscoracious basalt. The groundwater flow direction, recharge area, and discharge arearnwere identified using chemical plotting of trends of major ions, TDS and EC. As therngroundwater moves from recharge to discharge areas along its path it evolved from Ca2+-rnHCO3 type to Na+-HCO3 type.rnConcerning the management practices, five representative woredas with their respectivernPA which can characterize the whole water supply problem of the catchment were chosenrnfor house hold water economy analysis. Findings of the study reveal that there are aboutrn354 water supply points, out of which 94 non functional. Lack of skilled manpower, poorrnconstruction and maintenance, poor planning and management practices, low communityrnparticipation are the main problems regarding the water supply schemes. Findings of thernstudy also indicate high community participation, wide investment opportunity forrnprivate sector, capacity building of professionals and accountability and transparency ofrngovernment officials are the main factors to sustain water supply schemes