It is important to understand variations in hydro-meteorological variables to provide crucial information for water resource management and agricultural operation. This study aims to provide comprehensive investigations of hydroclimatic variability in the Bilate watershed for the period 1986 to 2015. Coefficient of variation (CV) and the standardized anomaly index (SAI) were used to assess the variability of rainfall, temperature, and streamflow. Changing point detection, the Mann–Kendell test, and the Sen’s slope estimator were employed to detect shifting points and trends, respectively. Rainfall and streamflow exhibited higher variability in the Bega (dry) and Belg (minor rainy) seasons than in the Kiremt (main rainy) season. Temperature showed an upward shift of 0.91 °C in the early 1990s. Reduction in rainfall (−11%) and streamflow (−42%) were found after changing points around late 1990s and 2000s, respectively. The changing points detected were likely related to the ENSO episodes. The trend test indicated a significant rise in temperature with a faster increase in the minimum temperature (0.06 °C/year) than the maximum temperature (0.02 °C/year). Both annual mean rainfall and streamflow showed significant decreasing trends of 8.32 mm/year and 3.64 mm/year, respectively. With significant increase in temperature and reduction in rainfall, the watershed has been experiencing a decline in streamflow and a shortage of available water. Adaptation measures should be developed by taking the increasing temperature and the declining and erratic nature of rainfall into consideration for water management and agricultural activities.