This paper analyses the factors that control rates and extent of soil erosion processes in the 199 ha May Zegzeg catchment near Hagere Selam in the Tigray Highlands (Northern Ethiopia). This catchment, characterized by high elevations (2100–2650 m a.s.l.) and a subhorizontal structural relief, is typical for the Northern Ethiopian Highlands. Soil loss rates due to various erosion processes, as well as sediment yield rates and rates of sediment deposition within the catchment (essentially induced by recent soil conservation activities), were measured using a range of geomorphological methods. The area‐weighted average rate of soil erosion by water in the catchment, measured over four years (1998–2001), is 14·8 t ha−1 y−1, which accounts for 98% of the change in potential energy of the landscape. Considering these soil loss rates by water, 28% is due to gully erosion. Other geomorphic processes, such as tillage erosion and rock fragment displacement by gravity and livestock trampling, are also important, either within certain land units, or for their impact on agricultural productivity. Estimated mean sediment deposition rate within the catchment equals 9·2 t ha−1 y−1. Calculated sediment yield (5·6 t ha−1 y−1) is similar to sediment yield measured in nearby catchments. Seventy‐four percent of total soil loss by sheet and rill erosion is trapped in exclosures and behind stone bunds. The anthropogenic factor is dominant in controlling present‐day erosion processes in the Northern Ethiopian Highlands. Human activities have led to an overall increase in erosion process intensities, but, through targeted interventions, rural society is now well on the way to control and reverse the degradation processes, as can be demonstrated through the sediment budget. Copyright © 2007 John Wiley & Sons, Ltd.