Land degradation due to soil erosion presents a major challenge for sustainable development. We investigated run-off and sediment yield (SY) dynamics in the northwestern highlands of Ethiopia. The study area included 14 zero-order catchments with a surface area ranging from 324 to 1715 m2. V-notch weirs produced from plastic jars were introduced as measuring alternatives that met local constraints. Run-off (RO) depth at the weir was registered manually at 5-min intervals during two rainy seasons in 2018 and 2019, and a total of 618 events were monitored. Rainfall was measured using tipping-bucket rain gauges. RO samples were collected in 1-L bottles, and suspended sediment concentration was determined. The mean event RO coefficient ranged from 3% for forests to 56% for badlands. Similarly, the mean annual SY was lowest for forests (0.8 Mg ha−1 yr−1) and highest for badlands (43.4 Mg ha−1 yr−1), with significant differences among land-use types (14.8 Mg ha−1 yr−1 in cropland, 5.7 Mg ha−1 yr−1 in grazing land, and 2.9 Mg ha−1 yr−1 in plantations). Soil organic matter (SOM) reduced RO and SY, necessitating the consideration of agronomic and land management practices that enhance SOM. Annual SY decreased exponentially with the rock fragment cover (RFC). In fields where RFC was less than 20%, collecting rock fragments for installing stone bunds resulted in a net increase in SY. Rehabilitating badlands and enhancing SOM content in croplands can substantially reduce catchment SY and hence contribute to the sustainability of land uses in the subhumid highlands.