The present study is an attempt to evaluate the watershed characterization and potentiality of Wadi El-Arish, Sinai, Egypt using Remote Sensing (RS) and Geographic Information System (GIS) techniques. Thirty morphometric parameters (e.g. stream numbers, orders, lengths, frequency as well as bifurcation ratio, drainage density and relief) were measured depending on SRTM data of digital elevation model (DEM) with 30m resolution that enhanced by topographic maps (1:50,000). Ten compound parameter values were calculated and prioritization rating for erosion risk assessment was carried out. Based on the values of the effective morphometric parameters, flash flood hazards were identified and evaluated. The land use map was constructed from the geomorphological units of Wadi El-Arish basin as well as the field observations. The drainage area of Wadi El-Arish watershed is 22260.3 km2. It is subdivided into twelve sub-basins of different areas. The morphometric analysis indicates that the watershed is of eight stream order with dendritic type of drainage pattern and homogeneous nature. The relief ratio, slope, ruggedness number and visual interpretation of the DEM indicate variable slope and topography with late mature stage of geomorphic development. On the other hand, the drainage density, texture, circulatory and elongation ratios prove that the majority of the sub-basins are almost elongated and have coarse and intermediate drainage texture which indicate medium to high infiltration capacity. Accordingly, these sub-basins most probably have good groundwater prospect where the most rainfall infiltrate to recharge the aquifer via permeable soils and/or fractured and weathered rocks. Concerning the soil erosion condition, the sub-basins with the lowest compound parameter value (e.g. W10: Wadi Abu Aliqanah and W12: Wadi Aqabah) have been subjected to maximum soil erosion and need immediate soil conservation measures. Based on the morphometric parameters which have a direct influence on flooding prone area, the flash flood hazard of Wadi El-Arish sub-basins are classified into three groups; namely high, medium and low hazard degree. For mitigation measure (e.g. erection of the runoff water) some dams and dikes at the crossing point between the seventh stream order and eighth stream order are recommended to be constructed. In addition, these measures will support the recharging of the shallow groundwater storage and aquifers. According to the potentiality of the study watershed, the land use map which constructed from the geomorphological units classified the Wadi El-Arish basin into four classes;namely high, moderate, low and non-suitability classes for agriculture uses. The volume of annual flood for Wadi El-Arish watershed was classified into five classes graded from very high to very low. The groundwater potentiality map indicates that the different geographic locations are suitable for groundwater storage with different magnitudes and potentialities, but the overall groundwater potential is of the moderate class. The Lower Cretaceous is considered to be the aquifer with the greatest development potential among the other aquifer systems due to their limited extent, poor productivity and/or water quality.