Irrigation development has been identified as an important tool to stimulate economic growth and rural development, and is considered as a cornerstone of food security and poverty reduction in Ethiopia. While a lot of effort is being exerted towards irrigation development, little attempt is being made toward the performance and sustainability of already constructed schemes. Therefore, the major concern of this study is to assess the irrigation efficiency of the scheme from performance indicators, and institutional aspect. To realize these objectives, structured household survey questionnaires, interviews, group discussions, field observations and literature were used. For household survey questionnaires a total of 32 sampled households were randomly selected from head, middle and tail command area beneficiery farmers. Performance of Ashar irrigation Scheme was evaluated using some selected internal indicators, classified into five groups, namely, conveyance efficiency, Application efficiency, water delivery performance, maintenance indicators and Institutional and support services aspects. Overall activities in primary data collected included: field observation, interviewing beneficiary farmers, discharge measurements in the canals. In addition to primary data, secondary data were collected from the secondary sources, and included total intended irrigable area, inetial irrigated area, intended discharge delivered to the main canal. The study has pointed out that the physical performance of Ashar irrigation scheme is poor. The construction of this scheme has little resulted in any change in cropping pattern of the command area. The command area of the scheme is 300ha but the current cultivated land is only 15.5ha. The design amount of water based on the design document was 0.3m3/s but the actual volume of water delivered to the main canal was 0.048m3/s. The bed level of the canal has rised due to littel cleaning of canal bed materials. The Ashar irrigation scheme conveyance systems are nonfunctional (41%) and there is little involvement of farmers in water management of the scheme. From 32 respondents only one farmer was participated in maintenance of the scheme and 15.6% of respondents participate to the construction of the scheme. Average conveyance and application efficiency of scheme is 83.33% and 49.43% repectively. The results of the Ashar irrigation scheme performance with respect to the indicators perform as low (43.7% and the overall efficiency of scheme is 41.19%