The Kashmir valley is prone to flooding due to its peculiar geomorphic setup compounded by the rapid anthropogenic land system changes and climate change. The study assesses the impact of land use and land cover (LULC) changes between 1980 and 2020 and extreme rainfall on peak discharge and sediment yield in the Upper Jhelum Basin (UJB), Kashmir Himalaya, India using KINEROS2 model. Analysis of LULC change revealed a notable shift from natural LULC to more intensive human-modified LULC, including a decrease in vegetative cover, deforestation, urbanization, and improper farming practices. The findings revealed a strong influence of the LULC changes on peak discharge, and sediment yield relative to the 2014 timeframe, which coincided with the catastrophic September 2014 flood event. The model predicted a peak discharge of 115101 cubic feet per second (cfs) and a sediment yield of 56.59 tons/ha during the September 2014 flooding, which is very close to the observed peak discharge of 115218 cfs indicating that the model is reliable for discharge prediction. The model predicted a peak discharge of 98965 cfs and a sediment yield of 49.11 tons/ha in 1980, which increased to 118366 cfs and, 58.92 tons/ha respectively in 2020, showing an increase in basin’s flood risk over time. In the future, it is anticipated that the ongoing LULC changes will make flood vulnerability worse, which could lead to another major flooding in the event of an extreme rainfall as predicted under climate change and, in turn compromise achievement of sustainable development goals (SDG). Therefore, regulating LULC in order to modulate various hydrological and land surface processes would ensure stability of runoff and reduction in sediment yield in the UJB, which is critical for achieving many SDGs.