Floods are among the most devastating natural hazards in the world. Pakistan has big rivers and flood planning and management is mainly concentrated on riverine floods occurring during monsoon. However, flash floods in hilly and Pothowar (semi-hilly) area are also common with demonstrated damage potential. This study was taken up to thoroughly investigate flood mechanism and inundation behavior in a watershed in Pothowar region by use of computer modeling with the Lai Stream as a case study. The Lai Stream Basin with an area of 235 km2 is located in northern part of Pakistan. Lai is the main stream passing through Rawalpindi city with a flood damaging history of almost once in every three years. 2001-Flood has been the largest among recorded events claiming 74 human lives, affecting 400,000 people and inflicting a capital loss of USD 0.25 billion. Thorough data analysis was performed to select most suitable data for computer modeling. The whole basin was divided in to fifteen (15) sub-basins and their respective yields were generated and subsequently incorporated in to river network of Lai Stream. Calibration was achieved successfully along the river profile with 2001 flood as target followed by the estimation of standard flood discharge for Lai stream. Thereupon useful recommendations have been made to utilize the model for mitigating flash flood events in urban/inhabited Pothowar (semi-hilly) region of Pakistan in particular and world over in general.