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Due to uninterrupted erosion and transportation, huge volume of sediments carried away by streams and rivers are finally deposited on the meanders, lakes, and reservoirs when the velocity of the surface water flow decreases. Kulfo River in the southern part of Ethiopia faces a challenge due to massive deposit of sediments. Hydrometeorological and spatial data of Kulfo watershed from the observed stream flow data series near Kulfo bridge and four meteorological station data were used to assess the depositional environment of Kulfo watershed. The data length covers the period from 2000 to 2019. Geomorphic parameters of the watershed were developed by using a 30m × 30m digital elevation model (DEM). The spatial distribution of sediment yield of the study area was estimated using SWAT, the soil and water assessment tool. Scenarios were developed to assess the effectiveness of watershed management interventions provided at the watershed and critical subwatershed level. The model genuinely replicated the observed discharge and sediment with an overall performance of 0.75 as measured by NSE. Twenty-one subbasins were created, and the observed average sediment yield was calculated as 11.9 ton/ha/y. The observed average sediment yield reduction at the hotspot subwatershed level postapplication of contouring, filter strip, terracing, and strip cropping were 40.79%, 57.94%, 66.02%, and 62.93%, respectively. By intricately analyzing, it can be referred that terracing is the best conservation measure to be incorporated into the affected subbasins.