Sandy soil has large particles which take up a lot of physical space and hence does not bind water. Amending such type of soil using soluble fertilizer leads to water pollution. Furthermore, Nitrogen fertilizers such as urea and ammonium nitrate are noted for high N loss through ammonia volatilization and hydrolysis. Therefore; Na-P1 zeolite was found to be better soil amendment material from locally available rock, pumice. In this study, pumice as a precursor from Minjar Shenkora Woreda (Semen Shoa) which is 50 km far from Debre Birhan was used in synthesis of Na-P1 zeolite. Hydrothermal treatment was performed with sodium hydroxide at different ratio of pumice to NaOH pellets (1:1.2, 1:1.5 and 1:1.8) at varying temperatures of 60, 80 and 100 °C and reaction time of 70,100 and 130 minutes. These values were taken based on the ranges of operating condition of zeolitization process. Effect of pumice to NaOH ratio, reaction temperature and reaction time on Si/Al ratio of synthesized zeolite was studied. Synergetic effect of reaction temperature, reaction time and ratio of pumice to sodium hydroxide on Si/Al ratio was also investigated. X-ray diffraction, ICP and FTIR were used to characterize the synthesized zeolite. Optimal silica to alumna ratio of 2.5 was obtained at temperature of 100 oC, reaction time of 100 minute and pumice to NaOH ratio of 1:1.5. The results obtained demonstrated that a pure Na-P1 type zeolite was hydrothermally synthesized, in alkaline medium at a specified optimum parametres. Effects of different dozes of the synthesized zeolite on sandy soil moisture content and water retention capacity were studied. From this study, increasing doze of zeolite increases soil moisture content for both coarser and finer sandy soil. The water holding capacity of the amended soil was tested using pressure plate extractor by applying different pressure (1, 3, 5 and 15 bar). It was observed that adding zeolite on the sandy soil increases the water retention capacity of the soil.