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Lake Turkana, the largest desert lake in the world, is fed by ungauged or poorly gauged river systems. To meet the demand of electricity in the East African region, Ethiopia is currently building the Gibe III hydroelectric dam on the Omo River, which supplies more than 80% of the inflows to Lake Turkana. On completion, the Gibe III dam will be the tallest dam in Africa with a height of 241 m. However, the nature of interactions and potential impacts of regulated inflows to Lake Turkana are not well understood due to its remote location and unavailability of reliable in situ datasets. In this study, we used 12 yr (1998-2009) of existing multi-source satellite and model-assimilated global weather data. We used a calibrated multi-source satellite data-driven water balance model for Lake Turkana that takes into account model routed runoff, lake/reservoir evapotranspiration, direct rain on lakes/reservoirs and releases from the dam to compute lake water levels. The model evaluates the impact of the Gibe III dam using three different approaches - a historical approach, a rainfall based approach, and a statistical approach to generate rainfall-runoff scenarios. All the approaches provided comparable and consistent results. Model results indicated that the hydrological impact of the Gibe III dam on Lake Turkana would vary with the magnitude and distribution of rainfall post-dam commencement. On average, the reservoir would take up to 8-10 months, after commencement, to reach a minimum operation level of 201 m depth of water. During the dam filling period, the lake level would drop up to 1-2m (95% confidence) compared to the lake level modeled without the dam. The lake level variability caused by regulated inflows after the dam commissioning were found to be within the natural variability of the lake of 4.8 m. Moreover, modeling results indicated that the hydrological impact of the Gibe III dam would depend on the initial lake level at the time of dam commencement. Areas along the Lake Turkana shoreline that are vulnerable to fluctuations in lake levels due to the Gibe III dam were also identified. This study demonstrates the effectiveness of using existing multi-source satellite data in a basic modeling framework to assess the potential hydrological impact of an upstream dam on a terminal downstream lake. The results obtained from this study could also be used to evaluate alternative dam-filling scenarios and assess the potential impact of the dam on Lake Turkana under different operational strategies.