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Introduction. Access to safe drinking water is essential to health, and it is a basic human right. However, drinking water treatment plant efficiency and its water quality are not well investigated in low-income countries including Ethiopia. Methods. A laboratory-based cross-sectional study was conducted among 75 water samples. Data analysis was carried out using SPSS version 22 to generate descriptive statistics, and one-way ANOVA was used to test statistically significant difference. Results. Physicochemical qualities of the water samples from tap water sources were found to be pH (6.88 ± 0.05), turbidity (5.15 ± 0.006 NTU), electrical conductivity (170.6 ± 0.1 μS/cm), residual chlorine (0.19 ± 0.003 mg/L), and fluoride (1.17 ± 0.009 mg/L). The removal efficiency of turbidity, total hardness, and nitrate was found to be 94.4%, 52.3%, and 88.7%, respectively. Removal efficiency of the treatment plant for total coliforms up to 91.6% (15 ± 0.26 CFU/100 mL in tap water) and faecal coliforms up to 99% (1.51 ± 0.03 CFU/100 mL in tap water) was recorded. Parameters of pH, temperature, and faecal coliform were statistically significant different at p < 0.05 in tap water source. The overall efficiency of the treatment plant (68.5%) and the water quality index (76) were recorded. Conclusion. Based on the results, some of the investigated parameters of water quality (turbidity, residual chlorine, total coliform, and faecal coliform) were found to be not within the permissible limits of WHO guideline values for drinking water quality. The water quality index of the water samples was categorized under good water quality. To adequately treat drinking water and improve the treatment plant, adequate preliminary treatments like screening to reduce the incoming organic loading, proper chlorination of the drinking water system, and frequent monitoring and maintenance of the treatment plant system are required.