Water is a vital element for the survival of the human race. Nevertheless, severe problems withrnits provision are as old as mankind. The gap between water need and supply has widenedrnsteadily in Ethiopia’s urban centers despite continuous efforts by the government in providingrnpotable water supply to the rapidly growing urban population. Similarly the study area, ReburnGebeya town was in the forefront of potable water supply and distribution problems. Thus, thernprimary objective of this research is to assess water supply and distribution of Rebu Gebeyarntown focusing on assessing the existing water supply, distribution progress and level of peoplernparticipation and investigating the major challenges of water supply and distribution and to seernthe effects of water supply shortages in the study area. In order to achieve these objectives thernresearcher applied descriptive survey research method. The researcher applied both probabilityrnand non-probability sampling technique to obtain the samples of households and others. Bothrnprimary and secondary sources of data were collected for study. These were analyzed viarnqualitative and/or quantitative methods, as appropriate, of data analysis methods. The studyrnindicated that the town has very low water supply coverage and there was no additional waterrnsupply service for the Town dwellers after 2009 and various factors such as population growthrnand urbanization, lack of technological capacity, insufficient financial resource, insufficientrnwater resources, weak sector coordination and topography of the area were interacting factorsrnto the very low water supply coverage. The town dwellers faced water related health problemsrncaused by both water-washed diseases and risks arising from waterborne infections, andrncommunity participation in the water supply and distribution schemes was inadequate. Safe andrnadequate quantity of drinking water is an essential input for life. However, the efforts made byrnthe state government and other organizations have not been enough in covering all habitationsrnof Rebu Gebeya town. The current level of potable water supply and distribution coverage and accessibility in Rebu Gebeya town is very low in any standards. Thus, to overcome the problems of existing water supply and distribution, there should be an urgent need for planned action to manage urban water resources and construction of additional water sources and simultaneously improving the current coverage of private pipe water distribution and also public fountains in favor of the lower income groups