Abstract Streams draining to Gilgel Gibe catchment cross agricultural and urban land uses receiving a different pollutant that challenges water quality. A total of 21 sampling sites were selected from seven streams of agricultural (n = 3), urban (n = 3) and forest (n = 1) land-use types. Composite samples were collected from upstream, middle and downstream of all land-use types. Twenty-three physicochemical parameters were measured from each sampling site. Temperature, DO, pH, EC, turbidity, width, depth, current velocity and discharge were measured onsite. Two milliliters of unfiltered water samples was collected from every site for laboratory analysis. Mean of NO3-N was highest in agricultural streams than forested and urban streams. In contrast, mean of SRP, NH4-N and COD and BOD5 concentration was greater in urban streams followed by agricultural streams, whereas forest streams are lowest. Concentrations of nutrients, EC and turbidity were recorded in increasing manner across land-use gradient from forested to agricultural and urban streams. The analysis of one-way ANOVA showed that all physicochemical parameters were significantly different among all sites with different land-use types (P < 0.05), except for water temperature (one-way ANOVA: F = 0.987, P = 0.494). NMDS and cluster analyses have discriminated the sites into three groups of land-use types. Then, we conclude that water quality of urban stream is highly impaired than agricultural streams, whereas forested streams have better water quality. Therefore, stream restoration projects, reforestation, conservation of riparian vegetation appropriate waste disposal need to be encouraged in the study area for sustainable management of freshwater resources.