Hamusit town has a great shortage of drinking water, and the town water authority needs to know where and how much water was lost, as well as the main causes for the loss of water that the research was going to study. The objective of the study was to determine the hydraulic performance problem and water loss of Hamusit Town water distribution system. The conducted methods included hydraulic analysis using hydraulic modeling and water loss analysis using the water balancing method. The result of the hydraulic analysis modeling shows optimum and minimum pressure levels during low-demand times, which are 60.28 m and 3.4 m respectively. Additionally, velocity ranges from 0 m/s to 0.21 m/s were observed during peak demand time. It was identified that 98% of the nodes in the distribution system have an optimum pressure head between 15 m and 70 m, while 2% of the nodes have a minimum pressure less than 15 m. The major problem found in the system is the intermittent operation of the booster pumping hour and leakage issues in the pipe system of the distribution network. These problems result in the distribution system delivering an insufficient amount of water to the consumers. From the water loss analysis, it is identified that, the current annual consumption of water is 45,875 m3, which results in a per capita consumption of 7.6 l/c/d. The current water consumption in Hamusit Town only satisfies 19% of the minimum urban water consumption value set by the GTP-2 minimum service level. The water loss analysis of the system, using the annual water balance of production and consumption figures, shows that 45.69% of treated water is lost as total non-revenue. These findings indicate that the utility has given less attention to water loss reduction. To minimize water shortages in the town, the utility should focus on managing non-revenue water and operational management of booster station pumping hours. Key Words: Hydraulic performance, Pumping hour, Non-revenue water, GTP-2