Lake Tana is the largest lake in Ethiopia, and its lake outflow is the source of the Blue Nile River that provides vital water resources for many livelihoods and downstream/international stakeholders. Therefore, it is essential to quantify and monitor the water balance of Lake Tana. However, Lake Tana is poorly gauged, with more than 50% of Lake Tana Basin being ungauged from in-situ measurements, making it difficult to quantify the lake inflow from surrounding basins. The lack of in-situ measurements highlights the need for the innovative application of satellite remote sensing. This study explores how freely accessible satellite remote sensing can be used to complement routine weather data to quantify the water balance of Lake Tana and its surrounding catchments. This study particularly investigates whether the outflow from Lake Tana can be estimated with sufficient accuracy as the residual of the lake water balance. Monthly inflow into lake was computed as the total runoff from the surrounding catchments; the runoff was estimated as the residual of the land-based catchment water balance using satellite precipitation improved with an integrated downscaling-calibration procedure, satellite evapotranspiration, and a correction term for changes in land total storage (soil moisture storage and deep percolation). The outflow from Lake Tana was estimated as the residual of lake water balance by combining satellite-based lake precipitation, changes in water storage, and lake inflow with estimated lake evaporation. Evaluation using limited available measurements showed that estimated annual runoff for two gauged subbasins agreed well with measurements, with differences within 4%. The estimated annual outflow from Lake Tana was also close to measured outflow, with a difference of 12%. However, the estimated monthly runoff from catchments and monthly lake outflow were unsatisfactory, with large errors.