Knowledge of the impacts of rural water supply and management on the livelihood ofrnthe user community can help in improving the future impacts of rural water supply.rnThus, the objective of this paper is to assess the impacts of rural water supply andrnmanagement systems on the livelihood of the user community in Babile Woreda, EastrnHararge Zone.rnThe data sources for the study were both primary and secondary. For secondary datarncollection document review was used as a tool to collect valuable information. Focusrngroup discussion, household surveys, observation method and key-informantsrninterview were used for primary data collection. Three stage sampling method wasrnused for primary data collection. For the selection of kebele administration stratifiedrnsampling method was used based on agro-climatic zone. Two kebele administrationsrnwere selected from kola and one from Woina dega agro-climatic zone. Purposivernsampling method was used for villages/communities selection and simple randomrnsampling method was employed for households' selection. House hold survey wasrnconducted in three selected kebele administrations and 90 heads of house hold werernrandomly drawn from the total 900 water supply user heads of house hold. Threernfocus group discussions were held with water committee members, elders, healthrnextension workers, development agents and kebele administration officials and fourrnobservations were conducted at different water points. For data analysis arncombination of quantitative and qualitative methods was employed. The method usedrnfor data analysis was simple description: like percentage, average and tabulation.rnThe study revealed that weak institutional capacity, poor water supply scheme and financialrnmanagement and there was weak linkage between water committees and Woreda WaterrnOffice were identified as short comings of the study area. The household survey alsornshowed that, the livelihood of the user communities in the study areas have beenrnimproved after they have started to use improved water supply. The improvements inrnlivelihood were manifested through improvement in health and time saving in all thernsurveyed communities. Whereas 35.6 % of the respondents said, the improved waterrnsupply has improved the income of households in terms of opening possibilities forrnsmall scale production and livestock watering but about 64.4% of the respondentsrnsaid no improvement in income after they started to use improved water supply. Thernimplication of reduction in time spent on water collection could mean more time forrnincome generating activities, food production, childcare and health. The study alsornrevealed that the linkage between impacts of water supply and management on thernlivelihood of the user communities. The better the management of rural water supplyrnindicated that the better was the improvement in benefits of improved water supply.rnThe evidence in the study area indicates that poorly managed water supply schemernhas adversely affected the livelihood of the user community, especially in those studyrnareas where water supply schemes interruption was with high frequency. The policyrnimplication of the study is strengthening of the institutional capacity at local level inrnorder to improve the rural water supply scheme management and impacts of ruralrnwater supply on the livelihood of the user community.