Soil erosion is the major cause of land degradation and reservoir sedimentation. Therefore, Modeling of runoff and sediment yield at a watershed level is very important. A conceptual, distributed and continuous time, Soil and Water Assessment Tool (SWAT Model) was selected for the simulation of the runoff and sediment yield from Sede watershed, in Blue Nile Basin. The main objective of the study was to determine the magnitude and extent of runoff and soil erosion of Sede watershed. To set up the model for simulation a 30×30 m DEM (Digital Elevation Model), land use map and soil map were used. The daily record weather data from 1996 to 2015 was used as input to the model. Daily stream flow record data and two to four days record sediment data within the year was available from 2002 to 2015. In this study both local (one-at-a-time) and global sensitivity analysis were performed and the ranking of the parameters in both cases compared. The model was calibrated by using both automated calibration and manual calibration for monthly to stream flow and daily for both steam flow and sediment by using the flow and sediment data from 2002 to 2011 and validated for 2012 to 2015.