Evaluating land suitability from the available land and water resources potential for irrigation development is very important for planning sustainable use of limited land and water resources. The critical objective of this study was to evaluate the suitable land resource potential for irrigation development for the Katar River watershed in the Rift Valley Basin in Ethiopia by using ArcGIS based on Multi-Criteria Evaluation (MCE) techniques. The steps undertaken were watershed delineation, characterizing the watershed by suitability parameters such as slope, soil texture, soil depth, drainage classes, proximity to river and urban, and land use land cover. And then, re-classification and mapping according to suitability classification, identification of irrigable land, and estimation of surface water potential and irrigation water requirements were followed. After reclassified, the suitability analyses of the each parameter were classified based on suitability classes for irrigation development. The weighting analysis of all parameters resulted that 34.08% was classified as high suitable (S1), 58.08% moderately suitable (S2), 3.8% marginally suitable (S3), whereas 3.21% not suitable (N) for surface irrigation development. Finally, comparing the required gross irrigation water requirement and available monthly flow of the River, the River has the capacity for the fulfilling irrigation water demand to irrigate command area of the watershed during dry season.