Climate change has the potential to reduce water resource availability in the Nile Basin countries in the forthcoming decades. We investigated the sensitivity of water resources to climate change in the Lake Tana Basin, Ethiopia, using outputs from global climate models (GCMs). First, we compiled projected changes in monthly precipitation and temperature in the basin from 15 GCMs. Although the GCMs uniformly suggest increases in temperature, the rainfall projections are not consistent. Second, we investigated how changes in daily temperature and precipitation might translate into changes in streamflow and other hydrological components. For this, we generated daily climate projections by modifying the historical data sets to represent the changes in the GCM climatologies and calculated hydrological changes using the Soil and Water Assessment Tool (SWAT). The SWAT model itself was calibrated and validated using the flows from four tributaries of Lake Tana. For the Special Report on Emissions Scenarios A2 scenario, four of the nine GCMs investigated showed statistically significant declines in annual streamflow for the 2080–2100 period. We interpret our results to mean that anthropogenic climate changes may indeed alter the water balance in the Lake Tana Basin during the next century but that the direction of change cannot be determined with confidence using the current generation of GCMs.