Much concern has been raised about population increase in the highlands of Ethiopia and its potential to decrease runoff from the upper Nile Basin to the lowland countries of Sudan and Egypt. The present article examines long-term data on population, land use, land management, rainfall, and surface runoff rates from small test plots (30 m²) and micro-catchments (73–673 ha) in the highlands of Ethiopia and Eritrea. Although the data were generated only on small areas, the results of the analyses can nevertheless be used to draw some conclusions relevant to the highland–lowland water controversies that have persisted in this particular region for many decades. The data indicate that there have been no significant trends over the long term in total annual rainfall in the highlands over the past 30–50 years. Nevertheless, test plot surface runoff rates are clearly influenced by land use and soil degradation, and hence by population density and duration of agriculture. In effect there is 5–30 times more surface runoff from cultivated or degraded test plots than from forested test plots. Analysis and interpretation of data support the hypothesis that surface runoff and sediment yield from the Ethiopian and Eritrean highlands into the upper Nile Basin have most probably increased in the long term due to intensified land use and land degradation induced by population increase, when seen in a historical perspective. Rates of base flow, in turn, must have decreased during the same period, but to a much lesser extent, although conclusive empirical evidence cannot be gained from this experimental setting. One can assume that soil and water conservation measures aiming to ensure long-term livelihoods in the humid to sub-humid highlands will, on the one hand, barely affect overall catchment runoff to the downstream areas, though they will considerably reduce surface runoff and soil loss on slopes as well as river sedimentation rates. On the other hand, in a semiarid catchment where intensive soil and water conservation was carried out, reduction in runoff rates was more pronounced. It can be concluded that population increase in the Ethiopian highlands increased overall runoff rates to lowland areas in earlier times, while recent efforts to conserve watersheds might affect total runoff rates in catchments only in semiarid parts, and much less in humid parts of the Ethiopian highlands.