Energy crisis has emerged as a serious issue in developing countries. Identification and utilization of new renewable energy resources site is of crucial importance to reduce the energy shortage and fossil fuel dependency throughout the country. The objective of this study is to assess micro to small run-off river hydropower potential sites on Abay River at Kessie watershed. Data used in this study include digital elevation model DEM (20 m × 20m), stream flow and head at different sites were measured using total station and Google earth for this research. Eighteen potential sites were identified in the study area. To select hydropower potential sites, extraction and selection of feasible stream reach along the river flow path profile is done within 500 meter maximum stream length were the main criteria to identify feasible stream reach and to select each hydropower site. From all potential sites, site12 and site1 have maximum and minimum potential capacity; 19344.713 KW and 41.203 KW respectively. The maximum installed capacity from 30% FDC flow values and the minimum firm power from 95% FDC flow values for all sites were estimated as 120374.378 KW and 12541.8 KW respectively. Analytical hierarchy process (AHP) was chosen in combination of geographic information system (GIS) as the method of multi-criteria decision method on selecting hydropower sites. Power, Discharge, Head, Accessibility and Distance were considered as criteria in this study and according to the suitability analysis result, site 17& 12 were selected as 1st &2nd ranks for best suitable sites respectively and site 1 is considered as low suitable from all sites. According to Ethiopian classification based on their installation capacity eighteen potential sites in the study area were selected. Among them seven sites are medium, four sites are small scales, four sites are mini scales and three sites are micro scales.