The sensitivity of Sutlej river sub-basin (middle catchment) which is located in N-W Himalaya is investigated for its hydrologic response to potential changes in climate variability. The predictors of two global climate models (GCMs) that are found to perform well over Indian subcontinents are downscaled, and future time series of temperature (maximum and minimum) and precipitation is generated using statistical downscaling model (SDSM) under A1B, A2, and B2 emission scenarios. An overall increase in mean annual temperature and precipitation is predicted under both the models for future periods. The predicted increase in temperature is relatively higher for HadCM3 model compares to CGCM3 model whereas it is opposite for precipitation. The model also predicts considerable shift in monthly pattern of temperature and precipitation. Further, soil and water assessment tool (SWAT) is employed to appraise future changes in stream flow and water balance of the sub-basin under projected climate scenarios. The simulation results show that in future, increase in mean annual stream flow are likely to range from 1.3 to 7.8 % for CGCM3 model and 0.3 to 3.4 % for HadCM3 model, respectively. However, decrease in mean monthly stream flow is predicted under scenarios of CGCM3 model (