A simple hillslope erosion model is developed and tested for watersheds ranging from 100 ha to 180,000 km2 in Ethiopian Highland. The erosion model is a simplification of Hairsine and Rose (1992) in which sediment concentration is a linear function of velocity and it has only two parameters to be calibrated. The model is coupled with a saturation excess water balance model that divides the watershed into three regions: two runoff producing areas (saturated and degraded) and a hillslope region with shallower soils where water infiltrates and is the source of the baseflow and interflow. The hydrology model has nine parameters consisting of the relative portion in the watershed and the water holding capacity for each of the regions and three subsurface flow parameters. Only surface flow generates sediment. Baseflow and interflow dilutes the concentration in the surface flow. This model was simulated in two upland watersheds (Anjeni and Debre Mawi with a size of 1Km2) in Blue Nile Basin dominated by agricultural activity and the Blue Nile Basin (180,000km2). The daily sediment concentration simulation for the two upland wa-tersheds and the 10-day model simulation for Blue Nile basin compares well with the measured data with Nash Sutcliffe efficiency in the range of 0.64 to 0.8 while the hydrology model was in the range of 0.7 to 0.9. The result suggested that sediment producing areas are only 20% and the higher parameter parameters in Debre Mawi and Anjeni might be because of agricultural activities, higer slope and gullies. The analysis also suggests that identifying the runoff source areas and predicting the surface runoff correctly is an important step in predicting the sediment concentration.