The residences of Chancho town depend on tube wells water for drinking and other activities. The aim of this study was to assess the drinking water quality of this water and to check the water quality along storage reservoirs and all the way to the end users (private tap water and household containers). Descriptive study was conducted to assess the quality of drinking water supply in Chancho town at the point of storage reservoirs, end user taps and household container water system. The water handling practice and sanitary condition in the town was also studied. Data were collected using stratified simple random selection method and questionnaire responses. Thirty triplicate water samples were collected from 2 reservoirs, 14 end user taps and 14 household containers. TC and FC were determined using Membrane Filtration method. Nitrate and phosphate were determined using HACH LANGE DR-2800 Photometer by Ascorbic acid method and Cadmium Reduction methods, respectively. TH, Ca2+, and Mg2+ were determined by EDTA Titrimetric Method. The rest physicochemical parameters (turbidity, Temp., pH, TDS and EC) were determined using field laboratory equipments mercury thermometer, pH meter, CL 5LD turbid meter and Con 2700 Conductivity meter. Two hundred sixty-six samples of households were selected for the questionnaire by stratified simple random selection method. Mean values of Temp., pH, Turbidity EC, and TDS, were 17.60±0.80 oC, 6.07±0.21, 0.69±0.06NTU, 287.83±7.98μS/cm, and 260.85±6.89mg/l, respectively. Turbidity, TDS, and EC values achieved with WHO (2011) standard but, and pH were not compared with WHO (2011) standard. Similarly, mean values of NO3 -, PO4 3-, TH, Ca2+ and Mg2+were 0.23±0.09mg/l, 0.20±0.07mg/l, 127.89±3.57mg/l, 30.86±1.44mg/l and 12.39±1.89mg/l, respectively which were fulfilled with WHO (2011) standard. Test results for FC and TC (14.89±10.42CFU/100ml and 34.90±19.11CFU/100ml, respectively) indicated that the water samples did not fulfilled with WHO (2011) standard. Correlation matrix shows that the results were statistically highly significant (p < 0.01) and moderately significant (p < 0.05). The study revealed that the water is contaminated by bacteria. Therefore, treatment of water and public health education to improve the water handling practice of the people in the area are very important.