Population growth causes land and water resources degradation in the Ethiopian highlands by changing the land use and land cover of the area. Land use/land cover change has been one of the factors responsible for altering the hydrologic response of watersheds. Various water resources projects planning and implementation will require knowledge of the extent of these changes on catchment hydrology. This study assesses the impact of land use and land cover change effects on stream flow and sediment yield using SWAT model in Upper Ribb watershed. The land use land cover change analyses for three different years of 1973, 1995 and 2016 were performed using ERDAS Imagine 2014 which was in turn used for estimation of stream flow and sediment yield. During this study most parts of the bush/shrub land were changed to grazing and cultivated land. An increase of cultivated land by 29.947% over 43 years period (1973 – 2016) resulted in an increase of stream flow and sediment yield by 6.143m3/s and 343.25 t/km2/year respectively. Model calibration and validation for stream flow and sediment yield were done at Upper Ribb gauging station and at Abo Bahir respectively. The performance of the model was checked at these stations. Both the monthly calibration and validation results showed good match between measured and simulated stream flow and sediment yield data with the coefficient of determination (R2) of 0.85 & 0.857, Nash-Sutcliffe efficiency (NSE) of 0.824 & 0.832 for the calibration, and R2 of 0.829 & 0.834 and NSE of 0.814 & 0.796 of the validation period in the same order. Spatial sediment distribution was done using the calibrated and validated sediment yield results of 2016 land use. High potential source areas were found at north-eastern part of the watershed which was a combined result of highly cultivated land, steep slope and erosive soil (Eutric Leptosols). Therefore, these critical sub- watersheds should preserve from further exposing of soil erosion through either forest resource development or uncultivated the steeply slope areas. And also the increasing/expanding bushes/shrub land should also encouraged in the watershed first by applying for those most erosion prone sub watersheds.