Significant changes have been observed in the hydrology of Central Rift Valley (CRV) lakes in Ethiopia, East Africa as a result of both natural processes and human activities during the past three decades. This study applied an integrated approach (remote sensing, hydrologic modelling, and statistical analysis) to understand the relative effects of natural processes and human activities over a sparsely gauged CRV basin. Lake storage estimates were calculated from a hydrologic model constructed without inputs from human impacts such as water abstraction and compared with satellite‐based (observed) lake storage measurements to characterize the magnitude of human‐induced impacts. A non‐parametric Mann–Kendall test was used to detect the presence of climatic trends (e.g. a decreasing or increasing trends in precipitation), while the Standard Precipitation Index (SPI) analysis was used to assess the long‐term, inter‐annual climate variability within the basin. Results indicate human activities (e.g. abstraction) significantly contributed to the changes in the hydrology of the lakes, while no statistically significant climatic trend was seen in the basin, however inter‐annual natural climate variability, extreme dryness, and prolonged drought has negatively affected the lakes. The relative contributions of natural and human‐induced impacts on the lakes were quantified and evaluated by comparing hydrographs of the CRV lakes. Lake Abiyata has lost ~6.5 m in total lake height between 1985 and 2006, 70% (~4.5 m) of the loss has been attributed to human‐induced causes, whereas the remaining 30% is related to natural climate variability. The relative impact analysis utilized in this study could potentially be used to better plan and create effective water‐management practices in the basin and demonstrates the utility of this integrated methodology for similar studies assessing the relative natural and human‐induced impacts on lakes in data sparse areas. Copyright © 2015 John Wiley & Sons, Ltd.