Lake Tana, biggest lake in Ethiopia, is very important water resource for community living and depending on the lake’s resources. However, the recent development activities at the catchment areas have negatively affected the water of the lake, and the climate of the region. This study delineated how land cover modification, climate change, population increase and development activities within the catchment have influenced the hydrological dynamics of Lake Tana. The land cover modification of southern part of catchment of Lake Tana in the years 1973, 1986, 1995 and 2008 were examined using land sat images. For the last 30 years, temperature, rainfall and lake level data were evaluated to identify change in climate and lake level. The annual means of temperature, rainfall, and lake level with their decadal variation and trends were analyzed with the support of linear regression model to assess trend change. Population change for the last 25 years and development activities were also assessed. The results have revealed that within the last 35 years more than 6.2% of lake’s area was converted to other land covers. Parallel to this period within the catchment there was declining of rainfall and lake level and rise in temperature. There was also increase of population and intensification of use of lake’s water in recent times. Thus, it is implied that change in Lake Tana water was caused by human factors and climate changes.