The ecological status of the Enfranz stream, located northwest of Bahir Dar city in the southern part of Lake Tana Watershed, was studied in wet and dry seasons from August 2010 to May 2011. This stream feeds Lake Tana and its total catchment area is 198 km2. Four sampling sites were selected along the stream. Psychico chemical parameters, water temperature, dissolved oxygen, turbidity, conductivity and pH, were measured. Macro-invertebrates were collected using standard dip net based on the Rapid Bio-assessment Protocols for use in streams and wadeable rivers. Physicochemical parameters varied significantly (P < 0.05) among sampling sites but not among seasons (P > 0.05). Mean values of dissolved oxygen concentrations at the head of the stream (6.08 mg/l) were significantly higher than the concentrations at the more down stream sites (P < 0.05). The mean values of turbidity (TDS) and conductivity at the two head stream stations (82, 165) were significantly lower than at the most down stream station (P < 0.05). Macroinvertebrate individuals were identified to the family level and a total of 15286 individuals belonging to 30 families were collected. The following macro-invertebrate metrics for stream water quality assessment were calculated: total Taxon Richness (TR), % Dominant Taxa (DT), Shannon Wiener diversity index (H`), Pielou Evenness Index (J’), Percent, Ephemeroptera, Plecoptera, Trichoptera index (%EPT), Hilsenhoff Family-Level Biotic Index (HFBI) and Percent Dipterans (%Dip). Results of ANOVA showed that macro-invertebrate metrics differed significantly among sampling sites (P < 0.05). TR, H`, J’, % Ephemeroptera and Trichoptera) being higher at the headwaters than at the most downstream station and DT, HFBI and % Dipterans being lower at the headwaters than at the most downstream station. Similarly, TR, H` and % Trichoptera showed significant variation among sampling season (P < 0.05); the value being higher in wet season than dry season while HFBI and % Ephemeroptera in the dry season was higher than in the wet season. Pearson’s correlation coefficients showed that, dissolved oxygen, turbidity and conductivity were significantly correlated with macro-invertebrate metrics while pH and temperature did not show any relationship. The study will serve as a baseline to what extent the inflowing streams of Lake Tana are affected by the surrounding land use and could be used to monitor future changes. It may also serve as information for planners and decision makers to consider as a basis for sustainable catchment management.