The study was conducted in 2013/14 with the objective of determining the effects of Bahir Dar textile factory effluents on the head of Blue Nile River water quality. Dissolve oxygen was higher at the upstream site of the river, whereas BOD5, TDS, and total alkalinity values were higher at wastewater outlet of the factory site. The mean values of dissolved oxygen, BOD5, and total alkalinity were above maximum permissible limits set by WHO for drinking water at head of Blue Nile River. The mean value of BOD5 was above permissible limit of IFC for textile effluents to be discharged to surface water. A total of 836 aquatic macroinvertebrate individuals belonging to 21 families were collected. The Shannon-Wiener Diversity Index, the Hilsenhoff family-level biotic index, family richness, and percent dipterans were calculated. Hilsenhoff family-level biotic index and percent dipterans metrics differed significantly among sampling sites (P < 0.05). Hilsenhoff family-level biotic index was higher at the most downstream site but percent dipterans were higher at site of discharge of effluent to the head of Blue Nile River. Therefore, there is indication that effluent demands frequent control and proper treatment before being discharged to the environment.