The objective of this study was to evaluate hydraulic and utility performance of water distribution network of Ataye town by modeling and analyzing the existing water distribution system. Water CAD software was used in evaluating the hydraulic performance of the water distribution system. Steady state and extended period simulation analysis were carried out to determine hydraulic parameters such as pressure and velocity. Utility performance was also evaluated using international water association performance indicators. For conducting this study, both primary and secondary data were collected and software such as water CAD V8i, Auto cad civil3D, Arc GIS version10.4, and other like Geographic positioning system Garmin72 and pressure gage were used. The simulated result for steady state analysis showed that 25.89% of nodes operating under15mwc, 5.4% with pressure > 60 m and the remaining 68.71% for pressure value 15-60 m which is optimum adopted pressure. Only 7% of distribution pipes have velocity 0.6-2 m/s and the remaining have <0.6 m/s velocity. For extended period simulation 34.34% during maximum demand time and 16.86% during minimum consumption hours have pressure <15m. 10.84% have negative pressure during maximum demand hours which means around 4500 people are not getting water during this time. Only 74.71% during minimum demand time and 65.06% during maximum consumption hours that the distribution system performs within the optimum adopted pressure. 14 nodes (8.43%) have pressure >60mwc which is maximum adopted pressure and this caused water losses in the system. 23.47% of the systems have velocity 0.6 -2 m/s and the remaining have velocity less than 0.6 m/s during high demand time. During low consumption time, 100% the system velocity <0.6 m/s. Hydraulic performance of existing system was evaluated by comparing model result hydraulic parameters (pressure and velocity) with MWIE design guide lines. Based on the IWA performance indicators, water utility of the town was evaluated and has low technical, financial, personnel and environmental performance. Average per capital water consumption of Ataye town in 2020 was 23.18 l/c/d which is less than half of 50 l/c/d. Finally, the study tried to assess the problems and extent of system disruption on water supply of Ataye town and provide locally relevant recommendation to stakeholders that help to solve the problems