Ethiopia has the lowest access to potable water supply in Africa despite its abundant water resource. In the Edja Woreda of Guraghe Zone, the average distance travelled to collect water is 46 minutes. The financial sustainability of the drinking water sector in the Woreda remains an issue for all stakeholders: the providers, the users, government agencies and donors. There is no clear guidance for water activities at Woreda level. Thus, there are no clearly specified roles and responsibilities.Therefore, the general objective of the study is to identify the challenges and prospects of potable water management in the Edja Woreda.