Lake Tana is one of nature’s best gifts to Ethiopia with unique and diversified socioeconomic benefits. It is the largest natural reservoir in Ethiopia and the head water of Abbay basin. However, after construction of a Chara Chara weir and further lying of Tunnel to Tana Belles, Lake Tana maximum amplitude of water level fluctuation was increasing from 2.18m to 3.56 m that differ substantially in 1.38m from amplitude of natural water level fluctuation. Understanding the natural characteristics of the Lake is paramount important to know precisely its Water balance and sustainable development. But it is difficult to study the natural characteristics of the Lake and its water balance using the regulated water level and outflow data sets as it doesn’t truly represent the natural phenomena. Thus it is evident that the regulated water level and outflow data sets have to be first naturalized before they are used for any analysis and modeling. Lake Level and outflow data that have been collected since 1976 by the Ministry of water, irrigation and Electricity were considered to assess the regulation effect and then for naturalization. Inflows to the Lake from the main tributaries have also been collected to find if there are any correlations with either the Lake level and/or the outflow. Regression analysis were used to develop the naturalization models. The regression analysis of flows from Gilgel Abay and Gummera with Lake Level shows that there is a very good correlation between them in different seasons. This seasonal good correlation has also been observed between Lake Level and outflow. This relationship can be used to naturalize the regulated Lake Level and outflow data sets.as the regulation has significantly changed the water Level and outflow characteristics of stochastic model and other related modeling and analysis should not use directly the regulated records.