The study area, Awassa town, is found within the main Ethiopian Rift bounded by the geographic coordinates of 6o48’N and 7o4’N latitudes and 38016’E and 38044’E longitudes It is the capital city of the Southern Nations Nationalities and Peoples Republic. Currently the demand for small to large sized buildings is increasing due to the ever-increasing population and expectations of a regional capital city. Like all the other cities of Ethiopia the government of the SNNPR is trying to shape the urban development of the Awassa town using a master plan. This plan allocates certain areas for certain purposes. But the suitability of the area for the proposed purpose has to be assessed. Here was where the objective for the present study born. The ground conditions, amongst other political, social and economical factors, have to be carefully assessed before deciding on allocating a given area for a certain purpose. That is, the impact of the ground conditions to civil engineering structures and vise versa has to be well understood. The main objective of the present study is to assess the suitability of the ground conditions for buildings and roads. That is the suitability of the geological and engineering geological conditions for buildings and roads. In order to do this it is tried to characterize the ground conditions. The index properties of soil samples taken from different parts of the city have been determined. And based on this the soils were classified according to the Unified Soil Classification System. Moreover, classification of the rocks of the study area was done based on their lithology and uniaxial compressive strength. To account for the variability in soil properties with depth, two depth ranges (0.5-1.5 and 2.5-3.5) were selected and characterized and soil distribution map produced. In addition depth to bedrock and the ground water conditions were assessed. It is found out that sound rock is found deeper than 15m and the ground water is greater than 20m and less as getting closer to the lake. Moreover the bearing capacity of the soils is determined and compared with the Ethiopian building code of standards. The settlement potential of the soils was also assessed based on the collapsibility of the soils and other previous works on them. The collapsibility was assessed based on practical values and some other criteria set by different authors. Based on these, the settlement potential of the soils at depth range of 2.5 –3.5m was assessed and a settlement potential map produced. The sandy silt soils were found to be relatively stable than the silty sand soils at this depth. Existing and future geoenvironmental problems of the study area are also discussed. Volcanism, earthquake, and flooding are discussed as related to the study area. Remedial measures for lake level rise related flooding and a ready to use guideline for the assessment of liquefaction potential are also presented. Areas close to the lake are found to be exposed to sever damages due to flooding. Moreover, the siltysand and sandy silt soils are capable of exaggerating the earthquake effects. In addition, the silty sand soils are found to be relatively stronger than the coexisting sandy silt soils; this was done based on the GI calculation for both soils Overall suitability assessment of the ground conditions that takes in to account, the settlement potential, flood vulnerability, liquefaction and amplification, and GI value, is made for both building foundations and road or pavement subgrade. Maps showing the overall suitability of the ground conditions for building and roads are also produced. The sandy silt soils are found to be favourable for buildings while the silty sand soils are found to be favourable for road subgrade