Satellite images give a synoptic view of target areas, measure target surface changes and provide the information needed for hydrological studies, river or Lake Basin management, water disaster prevention, and water management. Lake Tana is located at an altitude of 1830 m and latitude longitude of 11.27°N and 37.10°E. The lake is the source of the Blue Nile River and it is the largest lake in Ethiopia with a surface area of 3,150 km 2 , a maximum length and width of 78 and 68 km respectively. In the past, several studies have been published on Lake Tana and its basin in a scattered manner. This necessitates state of the art review that highlights achievements, models, algorithms, and identify gaps in knowledge. Different types of hydrological models have been applied. The majority of the recent studies utilized simple conceptual and statistical approaches for trend analysis and water balance estimations, mainly using rainfall, temperature and evapo-transpiration data. To a greater extent, recent studies have used advanced semi-physically or physically based distributed hydrological models driven by high resolution temporal and spatial data for diverse applications. A review of the methods used and the role of satellite remote sensing in this regard to understand the hydrology of Lake Tana and its basin are presented.