The rapid growth of urbanization, industrialization and poor wastewater management practices have led to an intense water quality impediment in Lake Hawassa Watershed. This study has intended to engage the different water quality indices to categorize the suitability of the water quality of Lake Hawassa Watershed for anthropogenic uses and identify the trophic state of Lake Hawassa. Analysis of physicochemical water quality parameters at selected sites and periods was conducted throughout May 2020 to January 2021 to assess the present status of the Lake Watershed. In total, 19 monitoring sites and 21 physicochemical parameters were selected and analyzed in a laboratory. The Canadian council of ministries of the environment (CCME WQI) and weighted arithmetic (WA WQI) water quality indices have been used to cluster the water quality of Lake Hawassa Watershed and the Carlson trophic state index (TSI) has been employed to identify the trophic state of Lake Hawassa. The water quality is generally categorized as unsuitable for drinking, aquatic life and recreational purposes and it is excellent to unsuitable for irrigation depending on the sampling location and the applied indices. Specifically, in WA WQI, rivers were excellent for agricultural uses and Lake Hawassa was good for agricultural uses. However, the CCME WQI findings showed rivers were good for irrigation but lake Hawassa was marginal for agricultural use. Point sources were impaired for all envisioned purposes. The overall category of Lake Hawassa falls under a eutrophic state since the average TSI was 65.4 and the lake is phosphorous-deficient, having TN:TP of 31.1. The monitored point sources indicate that the city of Hawassa and its numerous industrial discharges are key polluters, requiring a fast and consequent set-up of an efficient wastewater infrastructure, accompanied by a rigorous monitoring of large point sources (e.g., industry, hospitals and hotels). In spite of the various efforts, the recovery of Lake Hawassa may take a long time as it is hydrologically closed. Therefore, to ensure safe drinking water supply, a central supply system according to World Health organization (WHO) standards also for the fringe inhabitants still using lake water is imperative. Introducing riparian buffer zones of vegetation and grasses can support the direct pollution alleviation measures and is helpful to reduce the dispersed pollution coming from the population using latrines. Additionally, integrating aeration systems like pumping atmospheric air into the bottom of the lake using solar energy panels or diffusers are effective mitigation measures that will improve the water quality of the lake. In parallel, the implementation and efficiency control of measures requires coordinated environmental monitoring with dedicated development targets.