Hydrological modeling is a technique for understanding hydrologic characteristics and estimation of the water balance of watersheds for integrated water resources development and management. The Soil and Water Assessment Tool (SWAT) model was used for modeling the hydrological behavior of the Nashe watershed in the north-western part of Ethiopia. The spatial data, daily climate, and stream flow were the required input data for the model. The observed monthly stream flow data at the outlet and selected sub-watersheds in the catchment were used to calibrate and validate the model. The model performance was assessed between the simulated and observed streamflow by using sequential uncertainty fitting-2 (SUFI-2), generalized likelihood uncertainty estimation, parameter solution (Parasol) and particle swarm optimization. The sensitivity of 18 parameters was tested, and the most sensitive parameters were identified. The model performance was evaluated using p and r- factor, coefficient of determination, Nash Sutcliffe coefficient efficiency, percent bias during uncertainty analysis, calibration and validation. Therefore, based on the set of proposed evaluation criteria, the SUFI-2 algorithm has been able to provide slightly more reasonable outcomes and Parasol is the worst compared to the other algorithms. An analysis of monthly and seasonal water balance has been also accomplished for the Nashe catchment. The water balance parameters were distinct for the three seasonal periods in the catchment. The seasonal water budget analysis reveals that the watershed receives around 19%, 69%, and 12% of rainfall through the short rain, long rain and dry seasons, respectively. The received precipitation was lost due to evapotranspiration by 29%, 34% and 37% for each season respectively. The surface runoff contributes to the catchment by 5%, 86% and 9% of the water yield.