The study was conducted on the upper Jemma catchment, in Blue Nile basin, central highland Ethiopia, Amhara National Regional State, which is located 254 km from Addis Ababa on the way to Mehal-Meda. The study area covered 3250 sq.km and having an average elevation range from 1556m to 3708m above mean sea level. The main objective of the study was to evaluate the groundwater resource potential of the area. This study has also tried to estimate the groundwater recharge of the catchment using the water balance method. Field based physico-chemical parameters have also been used to characterize the groundwater. The annual precipitation of the basin calculated from long term mean monthly rain fall data is 1114.3mm/year. The actual evapotranspiration (AET) and surface runoff (SRO) are 745.77mm/year and 234.23mm/year, respectively. The mean annual groundwater recharge of the upper Jemma catchment is calculated to be 134.4mm/year, which corresponds to 12% of the total annual precipitation. The study area is mainly covered by tertiary volcanic rocks with some Mesozoic sandstone and quaternary deposits. In the catchment highly fractured and weathered basalt, elluvial and alluvial deposits with mixed aquifers have high permeability and productivity for groundwater reservoir. The main recharge area of the catchment is Tarmaber Megezez Mountain, Mezezo, Kobastil, Yegem and other mountain chain in the eastern part of the catchment, which are located at higher elevation. These highland areas get high rain fall compared to the surrounding lowland. Mostly the groundwater movement is parallel and sub-parallel with the surface water flow of the topography and structures of the area. The electrical conductivity and TDS of the catchment ranges from 85.8Î¼S/cm to 334.2Î¼S/cm and from 55.8mg/l to 217.2 mg/l, respectively. This shows that the groundwater quality falls within the freshwater group of the WHO standard.