<p>The study area is a watershed situated in the southern Arabian Peninsula, encompassing southwestern Saudi Arabia and northwestern Yemen. With an arid-to-semiarid climate and increasing water demand, the watershed provides a suitable setting for evaluating water security amid combined environmental and anthropogenic pressures. The paper examines the effects of land use change and climate variability on water availability and scarcity, analyzed through the components of blue and green water, over the period from 1985 to 2022. The Soil and Water Assessment Tool (SWAT) was used to simulate hydrological processes under various land-use and climate conditions. Four scenarios were constructed by merging land-use data from 1985 to 2022 with climate data from two distinct periods (1980–1995 and 1996–2005) to isolate the impacts of land-use and climate variability. Water stress was assessed using blue and green water indicators, in conjunction with the Falkenmark index, across 21 sub-watersheds. The findings reveal that changes in land use, particularly urban expansion and a decline in cropland, have contributed to increased blue water scarcity in the northeastern sub-watersheds. In contrast, green water scarcity was more acute in the southern areas dominated by pasture. Climate variability led to moderate changes in water availability, with blue water fluctuations ranging from − 1.15% to + 8.83%, and green water fluctuations from − 3.52% to + 0.87%. The Falkenmark indicator indicated an increase in water stress in sub-watersheds with higher population pressures and lower per capita water availability. The results emphasize the spatial variability of water stress drivers and highlight the necessity of integrated land and water management strategies to enhance water security in arid and semi-arid regions.</p>