The general objective of the study was to examine the impact of electronic banking on customer satisfaction in banking service by taking Wegagen bank branches in Mekelle as a case study. To this effect, mixed research method was employed and data was collected from 280 users of E-banking of six branches of the Wegagen bank using convenience-sampling technique. SERVPERF model were considered as the base for this study by applying the descriptive cross sectional survey design. A questionnaire with 5-point Likert scale has used to collect the data by conducting survey. The results of the study implied that majority of users of E-banking were the male, single, the educated (First-degree holders), salaried (private organizations); whereas, businesspersons and women are not actively using the service of E-banking. E-Banking currently provided for saving and current accounts holders only. E-banking has improved customer satisfaction, reduced frequency of bank room and waiting time for customers. There were customers who do not know the fee charged for being E-banking users. The bank customers' satisfaction increased after being E-banking users, enabled customers to control their accounts.