Soil erosion reduces the productive capacity of the land, which leads to global food insecurity, decline landscape beauty, decrease quality of water, loss of aquatic lives in water bodies, and Catchments. Generally, Soil erosion problems disturbs the whole ecological process. The Main objective of this study was to identify source areas of soil erosion and quantify rate of soil erosion and sediment yield in Andassa watershed, Blue Nile Basin. In this study, RUSLE and Multi Criteria Decision analysis (MCDA) technique integrated with GIS and Remote sensing was applied to estimate soil erosion rate, identify major soil erosion factor (s), prioritize and map the most sensitive soil erosion sources of the watershed for soil and water conservation practice. The results of the study show that mean annual soil loss of Andassa watershed was about 68 t ha1 yr-1. From soil erosion factors, Topographic wetness index followed by land use land cover have been found to have significant effect on soil erosion in the watershed. Based on the combined result of the soil erosion parameters, upper part of the watershed was more sensitive to soil erosion. The combined result of MCE and RUSLE result showed that 21.17% of Andassa watershed was highly sensitive, 23.17% moderately sensitive, 46.78 % slightly sensitive, 8.31% currently not sensitive and 0.04 % were constraint to soil erosion. Based on these results, the watershed has significantly at high to moderate risk of soil erosion (44.34%) from the hole watershed. Thus, the Upper part of the watershed is under high class of soil erosion source and needs immediate attention in terms of management as well as planning perspective and it should be managed for conservation and environmental protection activities. From the overall combined map of Multicriteria decision analysis (MCDA) and revised universal soil lose map showing the areas of increased risk erosion represented by highly sensitive (S1), moderately sensitive(S2), less sensitive(S3), and non-sensitive(S4) areas so the governmental or non-governmental organizations or any concerned organization should refer this important severity map of soil erosion for watershed management and priority of the watershed. Even though measured values of sediment yield at the catchment are hardly available sediment rating curve developed in order to compare with the estimated sediment because significant amount of soil loses are sourced from Gully sites. There was significant difference between estimated and measured sediment yields because RUSLE model doesn’t consider gully erosions so mapping gully potential zones were mandatory and vital for best conservation priority of the watershed.