The Gilgel Abay watershed faces significant challenges regarding groundwater manage-ment and sustainability. Increasing demand driven by population growth, climate change, industrialization, urbanization, and changes in living standards has led to a decline in the groundwater table in the watershed. This research aims to simulate groundwater flow in the Gilgel Abay watershed using the MODFLOW model, conceptualized as one one-layer confined, unconfined aquifer system with Well data. The model incorporates spa-tially variable recharge and hydraulic conductivity under well-defined boundary conditions. The model calibration showed high efficiency, with statistical parameters in-dicating a mean error (ME) of 0.68%, an absolute mean error (AME) of 8.89%, and a root mean square error (RMS) of 1.41%. The calibrated model simulated results indicated a total outflow of a watershed is 1,131,734,877.5 m³/year, by -6.25% error with the out-flow. Various scenarios were analyzed to assess aquifer response to increased withdrawal rates by 50%, 100%, and 150%. In the first scenario, groundwater levels decreased with a maximum drawdown of 5.9 meters and a minimum of 0.42 meters. In the second scenar-io, the maximum drawdown was 8.34 meters, with a minimum of 0.73 meters. In the third scenario, the maximum drawdown reached 15.33 meters, with a minimum of 0.89 meters. The average groundwater drawdowns across 44 observation wells were 3.27 me-ters, 4.5 meters, and 6.5 meters for the first, second, and third scenarios, respectively. Furthermore, the first scenario showed a 10% reduction in constant head outflow and a 1% reduction in river outflow, with a 2.6% increase in river leakage. In the second sce-nario, constant head outflow had reduced by 18%, and river outflow decreased by 5%, with an 8% increase in river leakage. The third scenario indicated a 29.5% reduction in constant head outflow. Overall, the scenarios demonstrated that increased groundwater withdrawal leads to enhanced river leakage and a higher gain from Lake Tana into the aquifer system. Keywords; - Gilgel Abay, Groundwater flow, Mod Flow, Hydraulic conductivity, Re-charge