Surface water–groundwater interactions play a critical role in regulating hydrological fluxes and sustaining water availability, yet they remain poorly understood in hydrogeologically complex terrains. This study employed an integrated modeling approach combining SWAT+ and MODFLOW to quantify water balance components, groundwater flow dynamics, and river–aquifer exchanges in the Chemoga watershed, a representative headwater system of the Upper Blue Nile Basin characterized by strong environmental and geological contrasts. Model results revealed substantial spatial heterogeneity in hydrological partitioning, with annual groundwater recharge ranging from 105 to 711 mm (mean = 296 mm; 24% of annual rainfall). Simulated groundwater flow exhibited a pronounced topographic control, with hydraulic heads declining from highland recharge zones toward deeply incised lowland gorges. River–aquifer interactions showed marked spatial variability, with the Chemoga river predominantly acting as a gaining stream in the highland and nick-point gorge sections (up to 2867 m³ d⁻¹), while transitioning to a losing stream in the midland floodplains and lowland gorge areas, with leakage reaching up to 75.0 m³ d⁻¹. These findings highlight the value of integrated, process-based modeling for resolving complex hydrological interactions, advancing understanding of groundwater flow regimes and supporting sustainable groundwater management in the Ethiopian highlands and other similar regions worldwide.