Water is the basic necessity for life and equally important for every human being. However, water scarcity is a very serious problem in the world that is becoming a global challenge for the decision-makers and planners despite recent technological advancement. Phenomenal population growth with haphazard urban development and climate change are the main reasons behind growing water crisis that is mostly affecting metropolitan cities around the globe. Karachi, a city of more than 20 million people, obtains water from Indus River for its domestic use. Its local water resources are insufficient in quantity as well as quality. Water scarcity for metropolitan is getting worse day by day due to exponential population growth, insufficient water supply from Indus River, scarce but erratic rainfall and the overall absence of sustainable water management. The watershed potential is unexploited rather depleting due to massive impermeable infrastructure development for settlements and uncontrolled sand excavation activity in river beds. These are increasing surface runoff and reducing groundwater as a result. In case of heavy rain, a large amount of runoff water drained into the Arabian Sea due to lack of water storage arrangements. This research aims to explore the watershed potential in Karachi region for identifying local resources and their harnessing. The study evaluates the surface water potential for rainwater harvesting (RWH) and to find the best practices for optimum water resource management in nearby villages and newly planned urban housing schemes located in the potential watersheds. Advanced techniques of Geographic Information System (GIS) and Remote Sensing disciplines are integrated with rainwater runoff model to discover the potential of watershed areas in the region. Soil Conservation Service (SCS) Curve Number (CN) method is adopted to evaluate rainfall runoff potential, as this technique is widely used and most reliable as compared to other methods used for such studies. Spatial Multi Criteria Evaluation (SMCE) technique is integrated with Analytic Hierarchy Process (AHP) method in GIS environment for rainwater harvesting sites (check dam, percolation tank, and farm pond) and dam site selection Thirty years rainfall and runoff data are used for watershed modelling. In the study, watershed characteristics are delineated over high scales from stream network to sub-watersheds and watershed boundaries along with area maps of RWH sites (11 check dams, 11 percolation tanks and 19 farm ponds) and dam sites (3 dams) to understand their potential in a geospatial context. It is estimated that annually about 4,22,280 m3 water is available only in Malir River. If this water is harnessed in a realistically feasible proportion, it may be a sustainable solution for overcoming the water crises. The RWH and dam sites suitability maps provide a clear picture of the existing potential and its spatial extent; while projected dam profiles and their characteristics give an in-depth overview of the suggested sites that can be used for future planning and estimations. Furthermore, this study is very effective for creating awareness among the stakeholders at the local and regional scale. It is recommended to implement the RWH techniques for all stakeholders including government authorities who should improve their knowledge and take sustainable initiatives with full ownership.