The available water resources in Saudi Arabia are under increasing stress and the hydrological problem is being complicated by the adoption of inadequate management strategies. The hydrological parameters (drainage networks, flow direction and flow length) have been extracted from the DEM of the SRTM using the automatic procedures embedded into the ArcGIS algorithms. The multi-temporal satellite images of the TM and ETM+ were obtained and processed to delineate the landcover and also to detect the extent of wadi alluvium, active channels and the accumulated water ponds. Cross sectional areas of the active channels and the extracted hydrological parameters of the DEM were integrated into the open channel flow equation of   Manning's to determine the spatially distributed time area zones of Wadi Al Rimah. The measuring of changes in cross-sectional areas of an active channel reach free of any tributary inflow and the estimated flow travel time gave a transmission loss rate of 12 mm per hour. The TRMM data of the 7^th of January 1999, the time area zones and the estimated transmission loss were used to compute the runoff hydrograph. GIS analysis of the extent of resulting water ponds and bottom topography of the playas dotting the Mesozoic carbonate rocks at outlet, showed that the excess runoff is approximately 19% and the flash flood event of January 1998 has delivered about 252 million cubic meters to the main playas. Outcropping of the Paleozoic sandstone (i.e. Al Saq aquifer) at the lower part of the catchment provides a good opportunity to harvest these occasional flows otherwise   representing a hazard and being wasted. The construction of a dam downstream is quite feasible, but a detailed geotechnical and environmental impact assessments are required.