The appropriateness of groundwater and surface water for domestic and agricultural uses was assessed in Kombolcha town located in Amhara region using water quality indexes. The town is one of the fast developing and emerging as a leading industrial town in Ethiopia and is selected as an industrial zone by the government. A total of eighteen groundwater and five surface water samples were collected using 250-ml sampling bottles at selected points and analyzed for major ions (Ca2+, Mg2+, Na+, K+, HCO3−, SO42−, Cl−) in the dry season (May 2017) and wet season (Nov, 2017). A water quality index (WQI) method was applied to evaluate the suitability of the groundwater for drinking purposes using eighteen groundwater sampling points and fourteen parameters (EC, TDS, HCO3−, Ca2+, Mg2+, Na+, K+, Cl, SO42−, NO3−, PO43−, Cu, Fe and F−), and each parameters were also compared with WHO drinking guidelines. According to WQI, groundwater samples of the present study show excellent (72.2%) and good (27.8%) in the dry season and excellent (83.3%) and good (16.7%) in the wet season. Assessment of groundwater samples from Na+, Mg2+, K+, Cl−, SO42−, HCO3−, NO3−, PO43−, F− and Cu parameters indicates that groundwater of the study area is chemically suitable for drinking purposes. However, some are unsuitable according to the EC, TDS and Ca2+ and all are not suitable with reference to iron (Fe). Groundwater and surface water quality for irrigation were evaluated using SAR, RSC, MR, PI, KI and EC. The results show that most of the groundwater and surface water samples were suitable/excellent for irrigation with some places in the study locations that belong to the good and permissible. The sodium hazard versus salinity hazard of the entire water sample collected in two seasons falls into category C2-S1 and C3-S1, indicating low alkali hazards and excellent irrigation water. Groundwater samples in wet seasons are more suitable than in the dry season for drinking and irrigation purposes, and groundwater samples are less polluted than surface water. The main source of pollution in the study area is the effluents from industries.