Comprehensive approach is a pre‐requisite to improve the estimation of variability in streamflow data for designing water supply systems, generating hydropower, determining environmental flows, allocating water, and conducting pollution studies that need a comprehensive approach. There is a need to model streamflow data to develop effective water policy plans when sufficient data are unavailable. This study aims at assessing the accuracy and applicability of the Soil and Water Assessment Tool (SWAT) model in predicting streamflow at the inlet of the Gilgel Gibe III dam watershed in Ethiopia. Historical meteorological data from nine available stations between 1987 and 2017 were used to predict the streamflow. The SWAT model was calibrated and validated for two different time periods (1997–1999 and 2003–2004) using SWATCUP program and SUFI‐2 technique. Calibration and validation were based on monthly observed discharges at the Abelti and Gojeb stations. The results showed acceptable values of R2, Nash–Sutcliffe modeling efficiency (NSE), and percent bias (PBIAS). At the Abelti station and Gojeb station, the calibration and validation results were 0.82, 0.79, and −10.1%; 0.88, 0.84, and −14.4%; and 0.86, 0.79, and 14.1% for calibration and 0.88, 0.8, and 11.1% for validation, respectively. The prediction uncertainty of 95% was consistent with the observed discharge. The mean annual runoff was 440.08 m3/s, demonstrating the model's effectiveness in simulating streamflow at the dam's inlet. The calibrated and validated model can be used to study the effects of climate and land use changes; analyze water quality and sediment yield; and inform future water policy plans, dam construction planning, and flood disaster risk management.