Lake Awassa is located in the central main Ethiopian rift valley. The Lake is importantrnwater resource in the study area and is used for irrigation, municipal and domestic waterrnsupplies as well as recreational purposes. Beside its importance, the level of the lake hasrnchanged dramatically over the past two decades. Because of this, the lake has attractedrnconsiderable attention in recent years especially when the lake flooded the surroundingrnarea including Awassa town which is established adjacent to the lake. Fundamental forrnunderstanding the lake level fluctuation requires knowledge of the lake's water balancernand its response to human induced and climatic changes in the hydrologic regime.rnThe present study develops a water balance forecast model for Lake Awassa. The modelrnuses annual values of surface runoff (gauged and ungauged), evaporation, precipitationrnand groundwater outflow to simulate past lake levels. For this reason, the model wasrncalibrated using multiple linear regressions and ARIMA model fit using SPSS software.rnThe calibrated model was verified and used to forecast future lake level based on variousrnselected applications and assumptions.rnThe model result shows that the surface runoff and evaporation accounts about 81% andrn38% in short term lake level fluctuation but in long term lake level fluctuationrnprecipitation and evaporation accounts 45% and 73%respectively. This is mainly thernresult of land use/cover changes which causes the runoff to increase and evaporation torndecrease. If this continues the lake would be a treat to the surrounding area and the townrnmight be at risk if remedial measures are not considered.rnAlthough the environmental implications of a given lake level are beyond the scope ofrnthis study, the model provides an essential tool for water policy and managementrndecisions in the Awassa catchment.