Water quality of rivers is very important as it is used for drinking, agriculture, domestic and industrial consumptions. But this valued resource is increasingly being threatened mostly by human activities. Demaza River, which crosses Gondar- Azezo town in Amhara Regional State, receives multitudes of pollutants. The aim of this study was to analyze the water quality of Demaza River using physico chemical and bacteriological water quality parameters. Three sampling sites were purposefully selected based on the expected pollution load. Nine water samples for nutrient and bacteriological analysis were taken once for each three consecutive months (February, March and April 2010 EC). Selected physicochemical parameters were measured in situ and nutrients were analyzed in the laboratory following standard methods. Total coliform and fecal coliform were counted by using membrane filtration method. Out of the 9 physico chemical parameters only 3 (Turbidity, NO2,-, PO43-) were beyond the standard set by EPA for surface water at sites1, 2, and 3. Total coliform and fecal coliform mean counts are 142.2CFU/100ml and 11.26CFU/100ml, respectively which were beyond the standard set by EPA for surface water. In general, the river can be considered slightly polluted based on the results of this study. However, from field observation, high pollution load is clearly seen as there is not waste management system in the town. This signifies immediate actions by concerned bodies so as to safe the river and hence the community. For example, the community should be award for proper sewage disposal and habit for using latrine. Stockholders and any social workers should take accountability to work on the river water and make the water free from pollution. Key word: bacteriological, coliforms, Demaza River, physicochemical, water quality