IntroductionUrbanization is one of the main causes for environmental problems due to the introduction of pollutants into water bodies. Lahi is crossing fintoselam. This river has long been used for a variety of purposes including source of public water supply, small scale irrigation, bathing, washing, animal watering, sand and stone dredging and recreation.Objective: To assess the influence of Finoteselam town on ecological status of Lahi river Methods: The assessment were assessed using physicochemical parameters, physical habitat assessment, biotic indices /metrics , human activity by observation as well as macroinvertabretes samples from eleven sampling sites coded S1to S11 along the river using the standard procedures. The assessments were involved in-situ measurements and collection of water samples in April 2019 then, analyzed the water samples in laboratory. Results:The biological analysis reveals a notable reduction of the diversity macroinvertabrates in the downstream direction where the minimum was at midstream sites .Upstream has significantly better macroinvertabrates assemblage than midstream(p-value<0.05).Physical habitat evaluation scores varied from 43 at S8 to173 at S1 and relatively lower score were recorded at midstream sites. Low % of Ephemeroptera, Plecoptera and Trichoptera with high family biotic index and high % of Diptera with low biological monitoring working party also indicated water ecology deteriorated mainly at midstream sites. Multivariate analysis of classical analysis, canonical correspondence analysis and none metric multidimensional scaling also indicated ecological deterioration at midstream sites mainly at S5 , S6,S7 and S8. Conclusion:Midstream was relatively more polluted than upstream due to influence of pollutant from Finoteselam town. The ecological status of upstream segments of the river is very good with slight organic pollutions, and at midstream is poor and significant degree of organic pollutions; whereas the status of the downstream is fair with fairly substantial water pollution showing moderate ecological disturbance. In general, midstream the sampling stations show the deterioration in water ecology and thus necessitated a need for mitigation measure to save the Lahi.