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Watershed modeling facilitates informed water resources management. Understanding the magnitude and timing of hydrologic fluxes, and natural and anthropogenic processes that govern water availability is key for allocation of limited water resources to competing sectors in arid regions. In this study, soil and water assessment tool (SWAT) is applied to model an agricultural watershed facing water resources challenges in a portion of the Middle Rio Grande Basin located in the New Mexico-Texas-Mexico border region where agricultural activities rely on conjunctive use of surface water and groundwater supply. The model is calibrated and validated under baseline conditions in the arid climate to evaluate potential impacts of climate change. Climate change scenarios are based on downscaled temperature and precipitation projections and projected inflows to Elephant Butte Reservoir, the main surface water source in the region. Simulation of key components of the regional water budget, including stream flow, evapotranspiration, and recharge improves understanding of regional water availability under climate change. The model is useful for exploring the impact of different water and land management strategies to cope with extreme climatic events.