Soil erosion is a serious threat in the Leza watershed. Deforestation, overgrazing, and poor land management accelerated the rate of erosion. To develop effective erosion control plans and to achieve reductions in sedimentation, it is important to quantify the sediment yield and identify areas that are high contributors of sediment at micro watershed level and over large areas. In this study SWAT (Soil and Water Assessment Tool) having an interface with ArcView GIS software was used to estimate sediment yield and identify spatial distribution of sediment yield in the watershed. The model was successfully calibrated and validated using measured stream flow and suspended sediment concentration at Leza gauging stations. The calibration and validation result showed that model performance evaluation statistics were in the acceptable range i,e coefficient of determination R2is 0.98 and 0.97 for calibration and validation respectively and Nash-Sutcliffe efficiency ENS of the model is 0.77 and 0.81for calibration and validation respectively. This indicates that the observed values show good agreement with simulated value of sediment yield. The model prediction result shown that the annual sediment yield leaving the watershed was found to be 6,755,202.8 ton/yr. The model prediction results indicated that about 36.6 % of the watershed areas severely eroded and about 40.86% of the watershed area has high erosion. The annual average sediment yield of the watershed was 22.8 t/ha/yr. and total of 6.76 million tons of sediment yield. The result of the study could help different stakeholders to plan and implement appropriate soil and water conservation strategies in the watershed.