Modeling soil erosion, sediment yield, and runoff are crucial for managing reservoir capacity, water quality, and watershed soil productivity. However, the monitoring and modeling of soil erosion and sedimentation rates in developing countries such as Ethiopia is not well practiced; thus, the reservoir capacity is diminishing at faster rates. In this study, the soil erosion, sediment yield, and runoff in the Megech watershed, Upper Blue Nile Basin, Ethiopia were modeled using the physically-based geospatial interface, the Water Erosion Prediction Project (GeoWEPP). The GoWEPP model was calibrated and validated at the Angereb sub-watershed and simulated to representative sites to capture the spatiotemporal variability of soil erosion and sediment yield of the Megech watershed. The model parameter sensitivity analysis showed that the hydraulic conductivity (Ke) for all soil types was found to be the dominant parameter for runoff simulation, while rill erodibility (Kr), hydraulic conductivity (Ke), critical shear stress (τc), and inter rill erodibility (Ki) were found to be sensitive for sediment yield and soil loss simulation. The model calibration (2000–2002) and validation (2003–2004) results showed the capability of the GeoWEPP model; with R2 and NSE values, respectively, of 0.94 and 0.94 for calibration; and 0.75 and 0.65 for validation. In general, the results show that the sediment yield in the study watershed varied between 10.3 t/ha/year to 54.8 t/ha/year, with a weighted mean value of 28.57 t/ha/year. The GeoWEPP model resulted in higher sediment value over that of the design sediment yield in the study basin, suggesting the implementation of the best watershed management practices to reduce the rates of watershed sediment yield. Moreover, the mean soil loss rate for the Angerb sub-watershed was found to be 32.69 t/ha/year.