Biogas technology is gaining traction globally, especially in countries where governments advocate for household biogas systems (HBSs). In Ethiopia, this renewable energy source is emerging as a viable alternative to traditional solid-fuel cooking methods. However, challenges persist in the functionality and performance of existing HBSs, including structural issues, pipeline leaks, low biogas output, and inadequate maintenance services. Despite its growing popularity, comprehensive studies on the effectiveness and operational efficiency of these systems remain scarce in the literature. This study analyses the functionality, performance, and effects of installed HBSs on indoor air quality improvement in South Gondar, Farta, and Libokemkem woredas using both qualitative and quantitative data analysis techniques. The study assessed 60 household biogas plants from July 2023 to June 2024. Data collection methods included a semi-structured questionnaire, a user survey, key informative interviews, personal field observation, and field tests. The analysis was conducted using Microsoft Office Excel and SPSS version 27.0.1 software. Multiple linear regression models and Pearson's correlation analysis were employed to evaluate the effects of operational parameters on biogas quality, specifically methane content. The survey revealed that 51.3% of biogas plants experienced faults. The most significant identified fault was the absence of a mixing device across all studied systems, which can severely hinder biogas production efficiency compared to mixed digesters and ultimately result in their abandonment. Other prevalent faults included insufficient biogas yields, cracked structural components, irregular feeding practices, leakage and blockage in piping systems, and thick scum layer formation in the main tank, which resulted in decreased biogas production. The constructed regression model was evaluated using R2 metrics, and it revealed that the variability explained for 6m³ biogas plants was 80.5%, and for 8m³ plants, it was 78.8%. Strong correlations were found between the quality of methane content and operational parameters: plant loading rate, retention time, and feedstock pH. The results also demonstrated significant environmental benefits from biogas use, with reductions in PM2.5 and CO emissions by 98% and 93%, respectively, compared to wood fuel. This study provides an innovative fault analysis of HBSs in Ethiopia and emphasizes the need for further research to address operational faults. By improving the quality of biogas production, there is potential to enhance indoor air quality benefits associated with these systems. The findings underscore the importance of addressing technical failures to realize the full benefits of biogas technology in rural settings. Key words: Biogas system, Functionality, Indoor air quality, Loading rate, Methane content, Operating Parameters, Performance, Technical assessment.