Land use/land cover (LULC) change is one of the important factors which have direct impacts on watershed hydrology. The impact of LULC change on streamflow of Upper Awash watershed was carried out using Soil and Water Assessment Tool (SWAT). The LULC change analysis was performed by using unsupervised classification method using Earth Resources Data Analysis System (ERDAS) imagine 8.5 software. The study results showed that the watershed experienced significant LULC change during 1986 to 2009. SWAT model was calibrated for periods 1986 to 1999 and validated for the periods 2000 to 2009. SWAT model was calibrated and validated for the sensitivity of streamflow parameters. Consequently, ten parameters were identified to be sensitive. Further, this model was utilized to assess the impact of LULC change on streamflow for period 1986 to 2009. The result showed that there was a reasonable agreement between observed and simulated streamflow with coefficient of determination (R2) and Nash-Sutcliffe efficiency values 0.86 and 0.77 for calibration, and 0.84 and 0.76 for validation, respectively. The evaluation of SWAT hydrologic response unit (HRU) due to LULC change showed that monthly streamflow was increased by 16.13 % in wet months and decreased by 20.8 % in dry months between the years 1986 and 2000. While between the year 2000 and 2009, it was increased by 0.92 % and 5.82 % for wet and dry months, respectively. Similarly, surface runoff was found increased and groundwater decreased during the study period. Further, the calibrated model can be utilized to understand risk and reliability of different structures and analysis of climate change, water quality, and sediment yield. Hence, this type of study can be useful for sustainable development in the Upper Awash basin as well as in other regions of Ethiopia.