Assessment of water loss and water coverage of most developing country’s town is essential for evaluation of current loss situation in water distribution system. where, most of developing towns of Africa there is no enough water distribution to water supply system, even the distributed amount of water loss due to lack of maintenance, management and financial problem. Degahbour town also one of towns facing such problem. Therefore, this study mainly focusses on assessment of current situation water coverage and water loss existing water distribution system. Based on amount of water production, consumption and population the loss and coverage of town was evaluated. Methodologically the study deals with collecting primary and secondary data from different regional office and water utility of the town. The data also collected by field observation and interviewing with utility office and some beneficiary representative. The data were evaluated for water loss and coverage with current population of 52602 and 818 number of connection in town. Our assessment result shows water coverage, loss, and per capital consumption in percentage (%) of 7.24%, 25.9%, and 5.26% respectively. Where for water demand and water consumption are 1859310 m3/year, 99841 m3/year respectively. Also, by AWWA analysis the apparent loss was 499.205 m3/year (1.43%), unauthorized consumption 249.603m3/year (1.185%), real loss 34112.193m3/year and unavoidable loss was found 19371m3/year (14.3%) respectively. Finally, according to above data the water loss of town seem medium to high. However, there is gap between demand and supply of town where there is enough resource for Degahbour. Keyword: Water Coverage, Water loss, Assessment Water Distribution, Degahbour