Forest clear cutting alters the hydrological processes such as interception, evapotranspiration and infiltration of the forested watershed and consequently increases the amount of water and sediment leaving the watershed. This study was conducted in the Upper Pearl River Watershed (UPRW) located in east-central Mississippito evaluate and compare the potential impacts of forest clear cutting on water and sediment yields using the Soil and Water Assessment Tool (SWAT) model. For this purpose, five hypothetical scenarios representing clear cutting at 10%, 20%, 30%, 55% and 75% of the total forest area of the watershed were generated. The SWAT model was first calibrated (1981-1995) and validated (1996-2008) for monthly stream flow, and later verified (February 2010 to December 2010) for monthly sediment load. Results show that the SWAT model was able to simulate stream flow and sediment load satisfactorily during the calibration/validation and verification periods, respectively. The potential changes caused in yields as a result of the changes in clearcut area were computed by comparing predicted yields from each clear cutting scenario and a base condition. Results from five scenarios demonstrate substantial increase in yields with an increase in the percentage of forest area clearcut. When compared with the base scenario, potential changes in water and sediment yields occur between 17% to 96% and 33% to 250%, respectively, with an increase in clearcut area from 10% to 75%. Results also indicate that, for all scenarios, percentage wise change is larger for sediment yield. Although predicted water and sediment yields generated from each scenario are subject to further verification with observed data, this study provides useful information about the potential amount of water and sediment yields that may be produced under each scenario, and that the potential changes that may happen on yields if similar magnitude of clear cutting occurs in the UPRW or in similar watershed.