To assess how stream flow in Gilgel Abbay River Basin will be affected by climate change, the HadCM3 model, developed at the Hadley Centre in the United Kingdom, was used to generate medium-high and medium-low emission scenarios in this study. The statistical downscaling model was used to generate future possible local meteorological variables in the study area. The down-scaled data were then used as input to the Soil and Water Assessment Tool hydrological model to simulate the corresponding future stream flow regime in Gilgel Abbay River Basin. Three benchmark periods simulated were 2011–2040 (2020s), 2041–2070 (2050s), and 2071–2099 (2080s). The time series generated by HadCM3 and statistical downscaling method indicate a significant increasing trend in both maximum and minimum temperature values, and a decreasing trend in precipitation. The hydrologic impact analysis made with the downscaled temperature and precipitation time series as input to the SWAT model suggested an overall decreasing trend in annual and monthly stream flow in the study area, in three benchmark periods in the future. This should be considered by policymakers of water resources planning and management.