In response to the continually increasing sediment concentrations in rivers and lakes, the Ethiopian government is leading an effort where farmers are installing soil and water conservation measures to increase infiltration and reduce erosion. This paper reports on findings from a four year study in the 95 ha Debre Mawi watershed where under the government led conservation works, mainly terraces with infiltration furrows were installed halfway in the period of observation. The results show that runoff volume decreased significantly after installation of the soil and water conservation practices but sediment concentration decreased only marginally. Sediment loads were reduced mainly because of the reduced runoff. Infiltration furrows were effective on the hillsides where rain water could infiltrate, but on the flat bottom lands that become saturated with the progress of the monsoon rain, infiltration was restricted and conservation practices became conduits for carrying excess rainfall. This caused the initiation of gullies in several occasions in the saturated bottomlands. Sediment concentration at the outlet barely decreased due to entrainment of loose soil from unstable banks of gullies in the periodically saturated bottom areas. Since most uphill drainage were already half filled up with sediments after two years, long term benefits of reducing runoff can only be sustained with continuous maintenance of uphill infiltration furrows.