Water is essential component for sustainable development and poverty alleviation. But due to the high rate of population growth and uncontrolled urban expansion in the towns/cities of developing countries the water supply system is under heavy pressure to meet the growing demand of the communities. The study is an appraisal of the impacts of urban expansion on water supply system in Adigrat town of Tigray national state, Ethiopia. Descriptive research method was employed for the study. Population is growing at fast rate in the town, this is due to increase result from natural growth, rural-urban migration, and high influx of population due from Eritrea and reclassification of rural land to urban use and emergence of new periphery settlements are observed. This phenomena is problematic form the town water supply services. To prevent the emergence of new settlements, establish an integrated legal basis and strengthen cooperative environment with all concerned stakeholders and recharging water by the natural aquifer, construction of additional public water points in the newly developed areas and controlling water loss.