Agaro Town has been experiencing the problem of potable water supply in adequate quality evenrnif the modern water supply system was installed since in 1961 and expanded its service byrndrilling a number of boreholes, it is common to see red water color in different interval ofrnmonths .Still a number of people do not have access adequate amount of potable water and alsornthey are not used for all home consumption. This research has focused on Water qualityrnproblems in town and its impact different bodies. rnLaboratory analysis characterizing and evaluating its quality by comparing with WHO andrnEthiopian Standards is used in this research for identifying water quality problems in the town.rnBy preparing Questionnaires with the aim of recognizing impact of water quality problems , for rndifferent people that cannot used distributed water for all home consumptions like merchant ofrnthe town that can partake coffee and tea, and people that can follow Muslim religion theyrncannot used for preparation of soup in the month of Ramadan. Economical loss by requiringrnanother source of water is described in this body of this study. rn TWATER CAD software is used in water distribution system to analyze pressure and velocityrnand Pressure measurement was taken in different location of distribution system for the purposernof calibration. The parameters like Iron, Electrical conductivity, Total coli form, Turbidity,rnDissolved oxygen and E. coli are not within the maximum permissible limit prescribed by WHOrnand Ethiopian drinking water quality standard. rnThe max and min pressure by WATER CAD is at 7 and 10 junction respectively and maxrnand min velocity is at 5 and 21 links respectively, whereas by Gagged pressure at samplernlocation point is 3 junction low pressure observed . The total simulation accuracy of pressure inrnthe network systems as assessed by statistical methods, Rrn=0.899rnGenerally it can be concluded that the source of water supply contain high level of iron, it affectsrncolor of coffee, tea and soup this results affect high cost loss in merchant of the town thatrnparticipate on preparation of coffee and tea , the people that follow Muslim region because ofrnsoup is prepared during the month of Ramadan, high level of iron contain high corrosive problem rnit affect pipes and pumps in the borehole . The other is as they not used pre and post chlorinationrntotal coli form and ecoli is show above permissible limit because this water born and waterrnrelated disease is the first top ten diseasesshown in the town.Aeration, chlorination and housernhold water treatment like boiling is the most recommended for removal of these contaminants inrnthe town water supply system. KEY WORD:-water quality parameters, physical, chemicalandrnbiological, water cad pressure and velocity, Agaro East of Ethiopia.