A study was conducted to characterize Bahir Dar tannery effluent and determine its impact on the head of Blue Nile River using selected physicochemical parameters. Samples were taken from the direct effluent stream and four sampling sites (one upstream and three downstream) were selected along the river to determine its impact on the river. Samples were collected from October to March, 2010/11. Temperature, pH, conductivity and total dissolved solids (TDS) were measured in situ using a combined meter. The samples for the rest physicochemical parameters were collected from the sites using the appropriate method. In the laboratory, BOD5 and COD were measured according to standard methods. Total nitrogen, total phosphorous, chloride and sulphide, were determined with Hach nutrient analysis kits and a Hach spectrophotometer. Total suspended solids were determined photometrically. The heavy metal, chromium (as Cr total), was determined using atomic absorption spectrophotometry according to standard methods. The results show that the impact of the effluent from biological oxygen demand (BOD), chemical oxygen demand (COD), NH3-N, total nitrogen, chlorides, sulphides and chromium was significant with concentrations of 342±52.5, 850.75±96.2, 288±75.8, 462.5±130, 1408.13±405.3, 16.05±3.04 and 3.54±0.55, respectively and most of the effluent characteristics were beyond the provisional discharge limit set out by the Ethiopian Environmental Protection Authority. Analysis of variance indicated that all the physicochemical parameters except temperature, pH and total phosphorous significantly varied among sampling sites (p