Urban water security in Sub-Saharan Africa is increasingly challenged by rapid urbanization, climate variability, aging infrastructure, and institutional constraints. This study explains the water supply–demand divergence in Gondar City, Ethiopia, using a sequential explanatory mixed-methods design that integrates time-series analysis, remote sensing, NRW (NRW) accounting, WEAP modeling, and stakeholder interviews. The analysis shows that the central problem is a structural source-capacity deficit created by delayed infrastructure expansion and progressive reservoir sedimentation. NRW reaches 36.12% of system input, with real losses accounting for 28.41%, further reducing the share of available water that reaches consumers. Long-term supply trends (2011–2024) were analyzed using Mann–Kendall tests, change-point detection, and lagged climate correlations. Reservoir storage change was quantified from Sentinel-2 imagery and validated against bathymetric evidence, while NRW was estimated using the AWWA water balance framework. Future supply–demand trajectories (2025–2045) were simulated under population growth, climate scenarios (RCP 4.5 and 8.5), sedimentation, groundwater decline, and planned infrastructure interventions. Results show that reservoir-based supply remained largely stagnant, while groundwater and spring contributions increased significantly, confirming a reactive shift from surface water to alternative sources. Even where total registered supply rose, household access did not improve because rising demand and distribution losses continued to outpace supply expansion. The study contributes empirically through the first integrated longitudinal analysis of multi-source water change in a secondary Ethiopian highland city, methodologically by combining remote sensing, AWWA water balance analysis, and WEAP modeling under data-scarce conditions, and theoretically by advancing sociology-hydrological understanding of path-dependent source substitution and maladaptation. The study recommends prioritized source augmentation, integrated NRW reduction, sediment management, and phased demand management within a coordinated urban water governance framework