Soil erosion is a major problem causing land degradation in most watersheds of Ethiopia. The Kessie watershed which found on the north east of Blue Nile Basin of Ethiopia is most affected areas by soil erosion, sediment transport and land degradation.rnSediment yield (the amount of sediment exported by a basin over a period of time) model evaluated in this paper is the Soil and Water Assessment Tool (SWAT). SWAT in this paper used to model soil erosion, identify soil erosion prone areas and assess factors that most contribute to soil loss on Kessie watershed.rnThe delineated watershed has divided into 23 sub basins, Model calibration and validation was done at Kessie station. The study found satisfactory agreement between daily observed and simulated sediment concentrations based on the values for coefficient of determination (rÂ²) and Nashâ€“Sutcliffe model efficiency (ENS), i.e. (0.773 & 0.81 for RÂ² and 0.71 & 0.72 for NSE, values for calibration and validation respectively).rnThe annual average measured suspended sediment generated from the sediment rating curve was 14.71 ton/ha/yr. and the simulated annual average sediment yield by SWAT model was 16.69 t/ha/yr. Out of the total 23 sub basin 12 sub-basins produce average annual sediment yields above 12 ton/ha/yr. and the highest loading is from North Gojjam and Beshilo Sub basins. The result has shown that 35.49 % of the watershed has exceeded the tolerable range, 23.54 % of the watershed is exposed in high erosion and sediment yield and about 40 % of the watershed is in moderate and low level.rnKey Words: Kessie Watershed, GIS, SWAT, Remote Sensing, Soil loss, Sediment Yield.