Lake Tana Basin is of significant importance to Ethiopia concerning water resources aspects and the ecological balance of the area. The growing high demands in utilizing the high potentials of water resource of the Lake to its maximal limit, pictures a disturbing future for the Lake. The objective of this study was to assess the influence of topography, soil, land use and climatic varia-bility on the hydrological and hydrodynamic processes of the Lake Tana Basin. The physically based SWAT model was successfully calibrated and validated for flow and sediment yield. Se-quential uncertainty fitting (SUFI-2), parameter solution (ParaSol) and generalized likelihood un-certainty estimation (GLUE) calibration and uncertainty analysis methods were compared and used for the set-up of the SWAT model. There is a good agreement between the measured and simulated flows and sediment yields. SWAT and GIS based decision support system that uses multi-criteria evaluation (MCE) was used to identify the most vulnerable areas to soil erosion in the basin. The results indicated that 12 to 30.5% of the watershed is high erosion potential. Pro-jected changes in precipitation and temperature in the basin for two seasons were analyzed using outputs from fifteen global climate models (GCMs). A historical-modification procedure was used to downscale large scale outputs from GCM models to watershed-scale climate data. The results showed significant changes in streamflow and other hydrological parameters in the period between 2045-2100. SWAT was combined with a three dimensional hydrodynamic model, GEMSS to investigate the flow structure, stratification, the flushing time, lake water balance and finally the Lake‘s water level response to planned water removal. We have found an alarming and dramatic fall of the water levels in Lake Tana as response to the planned water withdrawal. The combination of the two models can be used as a decision support tools to better understand and manage land and water resources in watersheds and waterbodies. The study showed that the Lake Tana Basin may experience a negative change in water balance in the forthcoming decades due to climate change as well as over abstraction of water resources. / QC 20100720