Land use Land cover change is a very important issue considering global dynamics and their responses to environmental and socio-economic drivers. It is a challenge to predict land use changes and their effects on water availability and erosion rates. This study assesses the impact of land use land cover change on stream flow and sediment yield using SWAT model in Temcha watershed in the Blue Nile Basin. Three different years of 1986, 1999 and 2013 land use land cover maps were produced from satellite images by ERDAS Imagine software using the Maximum Likelihood Algorithm of Supervised Classification. The accuracy of the classified images was assessed using confusion matrices. The result indicated that cultivated land increased from 49.50 % to 87.44 %, while Grazing land has decreased from 10.97% to 6.31%, Forest area has decreased from 21.83% to 5.94% and Bush land decreased from 17.70% to 0.31% between 1986 to 2013. This change caused an increase of mean monthly stream flow for wet months by 2.23m3/s while the dry season decrease by 0.58m3/s and an increase of mean monthly sediment yield for wet months by 67.11 ton/day while the dry season decrease by 6.45 ton/day. The model results indicated a good agreement and correlation with the observed stream flow data with NSE = 0.74, R2 =0.75, and RSR = 0.51 and sediment transport observed data with NSE =0.68, R2= 0.70, and RSR = 0.56 values. From this study it can be concluded that Temcha watershed has experienced a significant change in land use land cover over the past 28 years. The changes in land use has resulted an increase of surface runoff and Sediment yield. It is suggested that the watershed needs for local governments and other stakeholders to apply proper soil and water conservation management and watershed development.