The sustainability of water resources in UAE is under threat due to the long term drought periods associated with excessive groundwater exploitation. The groundwater exploitation was carried out without considering the actual aquifer recharge. Therefore, quantification of surface water potential and the magnitude of groundwater recharge in the area are necessary for better management of the water resource. In the present study, HEC-HMS was used to quantify the surface water potential and Visual MODFLOW was implemented to assess the groundwater recharge in the study area. The results of surface hydrology modeling and other hydrogeological information were used to develop the input of the groundwater flow model in Wadi Ham area. The available historical groundwater level data were used to calibrate and validate the model for both the steady and transient conditions. The water budget calculations were used to determine the increase in the groundwater recharge due the construction of Wadi Ham dam in 1982. Different scenarios of groundwater levels were simulated based on the probable surface water, recharge and draft conditions. A Strategy for the sustainable use of water resources in the study area was discussed.