Land use land cover dynamics has an impact on stream flow of the Muga watershed. The study mainly focused on impact of land use change on stream flow under different land use land cover dynamics of the watershed. Land use land cover maps of 1985, 1990, 2004 and 2018 were developed using satellite image through maximum likelihood algorithm of supervised classification using ENVI 5.1 softwere. A physical based, semi-distributed hydrological model, SWAT was used to simulate LULC effects on the hydrological responses of Muga watershed. During the study period the land use land cover has changed due to population growth. The cultivated land increased by 32.64 % and while forest land decreased by 0.2 %.The simulated stream flow results were utilized to analyze seasonal variability of stream flow due to land use land cover changes. The performance of the SWAT model was evaluated through sensitivity analysis, calibration and validation. The calibration result shows good agreement between daily observed and daily simulated stream flow with R2 and NSE values of 0.89 and 0.85 respectively. The validation result shows good agreement between daily observed and daily simulated stream flow with R2 and NSE values of 0.89 and 0.83 respectively. Sensitivity analysis using the SWAT model has pointed out some crucial parameters that control the stream flow in the catchment area. The result of this study indicated that the mean seasonal stream flow were increased from 5.56 m3/s to 14.94 m3/s by 9.38 m3/s for wet season and decreased from 0.83 m3/s to 0.37 m3/s by 0.46 m3/s in dry season over 20 year’s period of flow.