In Ethiopia in general and in Bahir Dar in particular, non-revenue water, which is the water that is lost before it reaches the customers, has become a critical issue. Reduction of non-revenue water remains one of the major challenges facing Bahir Dar city, and currently, there are no proper reduction strategies planned for non-revenue water. The general objective of this study was thus to identify the causes of water loss and to investigate the issues and challenges of reducing non-revenue water in Bahir Dar City. To achieve this objective, Water Audit Software was used to estimate apparent losses, and to analyze non-revenue Water components; leak detecting device in leak noise correlator was used to identify the area of leak points. In addition, questionnaires and interviews were conducted to identify the causes and possible solutions on water losses. Statistical analysis was applied to analyze the non-revenue water questionnaires and interviews. Quantitative and qualitative research techniques within a probability systematic and a non-probability purposive sampling methodology were used in this study. The results showed that yearly minimum and maximum non-revenue water for Bahir Dar City from 2015/16 to 2019/20 were 44.93 and 52.21 %, respectively. In the study period, it was observed that the average area of leak points based on leak detection measurement and leak noise correlator to be 6 leak point per kilometer, and the non-revenue water in Bahir Dar water supply system is high that reaches up to 45% of the system input volume. Out of the total non-revenue water, 1.1% was unbilled authorized consumption, 27.41% apparent losses and 71.5% of non-revenue water volume were real losses. According to the questionnaires and interviews result, the main reasons for the high non-revenue water in Bahir Dar water supply system are the present way of water network management, which lacks of maintenance and repairs, lack of active leakage control, high unpaid water bills, poor motivation of staff and low team spirit and insufficient financial resources of the utility. Therefore, for a non-revenue water mitigation program to work, it is important to follow an integrated triplex approach - the technical, managerial, and socio-cultural measures. Since a high percentage of non-revenue water is a huge loss of resource, it is necessary to give immediate attention to reducing it significantly.