Construction of dams causes reduced flow velocities, inducing gradual deposition of sediments carried by the inflowing stream, and resulting in sedimentation and ultimately diminishing reservoir storage capacity. This study was conducted in Legemara reservoir, which is located in Borena woreda, South wollo zone, Amhara region with the objective of determine sediment accumulation in the reservoir and identify erosion risk area. Because of the extent of the problem is not studied yet. This paper presents the result of sediment deposition using the original topographic map and bathymetry data in order to estimate the reservoir capacity by developing TIN in ArcGIS 10.1. The soil erosion model (RUSLE) was used in order to estimate soil erosion from catchment and prioritized micro watershed for soil and water conservation measure. The result shows that Legemara reservoir lost 41.67% of its capacity due to sedimentation in six years operation period. Average rate of sedimentation is estimated to be 54196.67 m3/ year with 6.94% annual rate of loss. This is extremely huge than globally estimated annual rate of siltation of reservoirs. With this rate of siltation, the dead storage completely filled by sediment and the live storage reduced by 30.21%. Based on bathymetry survey result the sediment yield and specific sediment yield of the watershed are71468.13 ton/year and 4497.68 ton/km2/year respectively. In general, the results obtained provide a basis for assessing future sedimentation problems in sub basin of Beshilo and for underpinning the development of sediment control and management strategies for the reservoir. Therefore, engineers, designers and decision makers should give attention providing bottom outlet during the design stage for sediment discharge in order to prolong the useful life of reservoir because it is the main design drawback of the Legemara dam project.