The River Nile is the second longest river in the world and its basin covers ten African countries including Uganda. In the light of growing human and industrial demand on its ecosystem, especially water resources, the need to support sustainable basin-wide resource management has risen over the recent past. Most economies in the Nile basin are dependent on rain-fed agriculture, which is strongly affected by climate. Therefore, the basin is vulnerable to a number of issues including land use change, climate change and climate variability. Other stress factors include rapid population growth, land degradation and the prevalence of human disease. These factors are likely to adversely impact on the basin ecosystem and agricultural productivity, which in turn affect the economic development in terms of food security, hydropower generation and provision of ecosystem services. It is imperative to conduct detailed hydrological assessment of the likely impact of land-use changes and climate variability on the hydrology of the Nile basin. This thesis therefore investigates the hydrological response to plausible climate and land use scenarios. This is carried out by testing climate and hydrological modelling tools for the Kyoga basin, within the Upper Nile. Climate modelling involved multi-site spatial and temporal modelling of rainfall in the Kyoga basin using stochastic tools under the Generalised Linear Modelling (GLM) framework. Climate modelling results showed that the structure of the GLM could not represent adequately the variability of rainfall over Kyoga, however, it could represent the variability within designated climatic zones. Assuming independence of the stochastic variability between zones in the Kyoga basin, GLM models for the Kyoga basin were then applied as statistical downs ea ling tools to generate future precipitation sequences conditioned on the results from six general circulation model (GCM) outputs for future climate (2020s, 2050s, 2080s) using results from the Special Report on Emissions Scenarios (SRES) prepared by the Intergovernmental Panel on Climate Change (IPCC) for the Fourth Assessment Report (SRES-AR4). With regard to climate change, warming of the basin resulted in a general increase in precipitation patterns and the results from the use of GLMs suggest that it is likely to have a relatively wetter December - February (DJF), March - May (MAM), September - November (SON) seasons and a much dryer June - August (JJA) season. Hydrological modelling involved the development of a semi-distributed rainfall-runoff model using the Soil Water and Assessment Tool (SWAT), applied on a daily time-scale to investigate the uncertainty associated with precipitation and model parameter identification. The SWAT model was also used to assess the sensitivity of several water resources components to alternative/plausible climate and land use patterns in the Kyoga basin. Hypotheticalland use change scenarios showed that the water resource estimates in the Kyoga basin are sensitive to intensification of agriculture and less sensitive to increase in spatial coverage of grasslands and shrublands. A warmer climate is also associated with increase in potential evapotranspiration, soil water and internal renewable water resources in the Kyoga basin and stream flows at several locations in the basin. The results from this PhD work contribute towards the development of climate and hydrological modelling tools applicable to equatorial climates.