Limited freshwater supply is the most important challenge in water resources management, particularly in arid and semi-arid basins. However, other variations in a basin, including climate change, population growth, and economic development intensify this threat to water security. The Oldman River Basin (OMRB), located in southern Alberta, Canada, is a semi-arid basin and encompasses several water challenges, including uncertain water supply as well as increasing, uncertain water demands (consumptive irrigation, municipal, and industrial demands, and non-consumptive hydropower generation, and environmental demands). Reservoirs, of which the Oldman River Reservoir is the largest in the basin, are responsible for meeting most of demands, and, protecting the basin’s economy. The OMRB has also faced extreme natural events, floods and droughts, in the past, which reservoir management plays a critical role to adapt to. The complexity of the climate, hydrology, and water resource system and water governance escalates the challenges in the basin. These factors are highly interconnected and establish dynamic, non-linear behavior, which requires an integrated, feedback-based tool to investigate. Integrated water resources (IWRM) modelling using system dynamics (SD) is such an approach to tackle the different water challenges and understand their non-linear, dynamic pattern. In this research study the Sustainability-oriented Water Allocation, Management, and Planning (SWAMPOM) model for the Oldman River Basin is developed. SWAMPOM comprises a water allocation model, dynamic irrigation demand, instream flow needs (IFN), and economic evaluation sub-models. The water allocation model allocates water to all the above-mentioned demands at a weekly time step from 1928 to 2001, and under different water availability scenarios. Meeting irrigation demands relies on the crop water requirement (CWR), which is calculated under different climatic conditions by the dynamic irrigation demand sub-model. This sub-model estimates the weekly irrigation demand for main crops planted in the basin. SWAMPOM also computes environmental demands or instream flow need (IFN) for the Oldman River, and allocates water to rivers to meet IFN under different policy scenarios and uncertain water supply. Finally, the major water-related economic benefit in the basin, earned by agriculture and hydropower generation, is computed by the economic evaluation sub-model. The results show that SWAMPOM could reasonably satisfy the demands at a weekly time step and provide an adequate estimation of the crop water requirement under different hydrometeorological conditions. Based on the SWAMPOM’s results, the average annual irrigation demand is 306 mm over the historical time period from 1928 to 2001 in the main irrigation districts. The average weekly instream flow need of the Oldman River is calculated to be approximately 20.5 m3/s, which can be met in more than 97% of weeks in the historical time period. Average annual water-related economic benefit was computed to be 192.5 M$ in the OMRB. It decreased to 82.8 M$ in very dry years, and increased up to 328.6 M$ in very wet years. This research also developed different sets of Oldman Reservoir’s operation zones, resulting in trade-offs between the optimal economic benefit, water allocated to the ecosystem, minimum floodwater and minimum flood frequency. This helps decision makers to decide how much water should be stored in the reservoir to meet a specific objective while not sacrificing others. A multi-objective performance assessment, Pareto curve approach, is applied to identify the optimal trade-offs between the four objective functions (OFs), and 18 different optimal, or close to optimal sets of operating zones are provided. The decision regarding the operating zones depends on decision makers’ preference for higher economic benefit, water allocated to IFN, or flood security. However, the set of operating zones with minimum floodwater causes 11 less flood events; the operating zones with maximum economic benefits result in 4.1% more financial gain; and the zones with maximum water allocated to IFN lead to 10.1% more ecosystem protection in the whole 74 years, compared to current zones.