Wetlands are important sources of water for humans and livestock in the dry drought-prone northern Ethiopian highlands. Hydrological changes in these wetlands affect local populations and are indicators of change in the upstream catchments. In this paper, we present a case study of hydrological and land cover changes in Hara Swamp located southeast of Kobo in Amhara State, Ethiopia. An integrated approach used remote sensing images, limited hydrological measurements, climatic data, and a survey of residents to gain complementary insights into what changes have occurred, when and why they occurred, and the local perceptions of these changes. Aerial photos and satellite images from 1964, 1973, 1986, 2000, and 2001 indicated limited flooding and dense woody vegetation cover in the wetland 40 years ago and a trend towards the current condition of no living trees/bushes, extensive flooding, and heavy sedimentation. Rainfall records revealed no significant trends which could sufficiently explain the observed changes in the wetland. A simple water budget analysis based on hydrological measurements indicated higher wetland flood levels were a result of increasing runoff and sediment inflow from the surrounding watershed over time. Reasons for increasing amounts of runoff were higher population pressure on the land and creation of more impermeable surfaces including houses and road construction in the watershed. Local residents' perceptions of the wetland changes, which were collected first, validated the sparse biophysical data and provided supplementary details. An integrated watershed management strategy is required to reverse the recent trends and protect the wetland resources.