Drainage structures are vital for towns. Recently urbanization is increasing time to time. Due to this imperviousness of the town area is increasing and flood due to storm water is the cause for societies complain in the town. Addis Zemen town is the town in Amhara region which is surrounded by mountains and has a flood risk due to storm water. This thesis is to investigate the storm water drainage system performance of the town by first delineating the town area and subdivide into sub-areas. From this nine most flood prone areas are selected. The IDF curve was developed using 16 years rain fall data collected from Amhara meteorological agency for Addis Zemen station. Then by using rational method the incoming runoff is determined based on weighted runoff coefficient due to different land use in each sub-area. Existing drainage channel capacity was determined in each sub-area using Manning’s equation. The analysis result shows that the design drainage capacity of the town is adequate to accommodate the incoming runoff from sub areas. Based on this study the problem in Addis Zemen is due to eroded sediment effect on the drainage canal capacity from mountains surrounding the town, lack of management like improper waste disposal way of the town, closing of road side storm water inlets to the ditch or culverts by different human interface causes and lack of some tributaries to the main drainage canals. Most of the town area has no drainage canals; this is also other cause of the problem like inundation of storm water in the town area and series cause of health problems, so the town planners, sanitary office and policy makers would take in to account sediment from the mountains, periodic cleaning, maintain the existing drainage canals and construct additional drains based on the flow direction parallel to the town development plan. Key word: drainage problem, hydraulic performance assessment, rational method, Addis Zemen.