Because of the difficulties to launch soil and water conservation and other environmental protection projects in all parts of a watershed at the same time due to constraints of time and cost; the most soil erosion source areas of watersheds have to be identified and prioritized. Soil erosion is a serious concern that constitutes to global environmental and economic problems. Since it reduces the dynamic capacity of the land, which leads to global food insecurity, decline landscape beauty, decrease quality of water, loss of aquatic biodiversity in rivers and lakes, eutrophication and generally it disturbs the whole ecology. The major objective of this study was to estimate soil erosion rate and source areas of soil erosion in Chemoga watershed, Blue Nile Basin. In this study, RUSLE and Multi Criteria Evaluation (MCE) technique integrated with GIS was applied to estimate soil erosion rate, identify major soil erosion factor (s), prioritize and map most sensitive soil erosion source areas of a watershed for soil and water conservation practice. Based on this, mean annual soil loss of Chemoga watershed estimated to be 78.6 t ha-1yr-1 which agrees with the annual soil loss of the highlands of Ethiopia. From soil erosion factors, catchment wetness contributes more followed by land use land cover and have significant effect on soil erosion in the watershed. Based on the combined result of the soil erosion parameters, lower part of the watershed were more sensitive to soil erosion. Overall result showed that 10.2 % of Chemoga watershed was highly sensitive, 77.5 % moderately sensitive, 11.8 % slightly sensitive, 0.5 % currently not sensitive and 0.1 % were constraint to soil erosion. Based on these results, the Chemoga watershed is at moderate risk of soil erosion. Thus, the lower part of the watershed is under high class of soil erosion source and demands immediate attention in terms of management as well as planning perspective and there should be prioritized for conservation and environmental protection activities.