Starting with the intensification of irrigation activities in the beginning of 1980s in Abaya and Chamo lakes area, the decreasing water inflow to the lakes caused denudation of the wetlands. The ecological situation in the lake region changed significantly during last four decades. The lakes and associated wetlands change have been studied using Landsat MSS (1973), Landsat TM (1986), and Ladsat ETM (2000) satellite imagery. Along with satellite imagery, other hydro-meteorological data were collected and hydro-meteorological data analyses were done to assess the variability of wetlands. From these data, lakes morphometric property estimation at different time series and water balance analysis for both lakes were done. Wetlands are mapped from the TCT image and these maps are subject to change detection to see the temporal and spatial variability of the wetlands. Moreover, the lake-morphometric area and volume variation have been studied. The result showed that between 1986 and 2000, a significant reduction has been observed but lesser than the previous decades (6.4 km(2)). The identified reason behind this change is that the free settlement and shoreline cultivation of the wetlands causing the soil erosion and eventually adds the sediment to the wetlands.