The biggest watershed in the Republic of Macedonia is the Vardar river basin. It is divided into several sub-watersheds: Upper, Middle and Lower Vardar, Treska River, Crna, Pchinja and Bregalnica. Frequent outflows of the river causing severe damage to the surrounding areas have been observed in Upper Vardar, or more precisely along the section running from the village Tudentse to the village of Jegunovtse. Therefore, the Ministry of Agriculture requested elaboration of a technical documentation for the regulation of this section of the river. The objective of this paper is to present the results from the hydrological analysis of the Upper Vardar basin, i.e., the river basin upstream from the section, which is the subject of regulation. The considered section for regulation of the Vardar river extending from the village Tudence to the village of Jegunovtse, with a total length of about 7 km, is situated in the Upper Vardar watershed, or the lower part of the Polog valley. With the hydrological analysis, there have been defined the referent quantities of water for the proportioning of the river regulation. For that purpose, the Vardar river watershed was analyzed upstream from the lowest downstream point of the considered section (Radusha) through definition of the watershed area by use of the DTM (Digital Terrain Model) module of the GIS geographical-information software. The physical-geographical characteristics and the existing heights of the watershed were defined and the geological and hydrogeological characteristics of the watershed were analyzed. CORTIVE Layer Classification was used to define the land use pattern. The climatic-meteorological characteristics of the watershed were analyzed by use of the data available at Tetovo and Popova Shapka stations. The water regime of the Vardar River was analyzed by use of data from measurements of the Vardar river discharge done at the hydrological stations in v. Radusha and v. Jegunovtse. To define the characteristic discharges of Vardar River, historical data on daily discharges at the station in v. Radusha (1951-1996), monthly discharges (minimum, average and maximum) at the Radusha station (1951-2008) and the station in v. Jegunovtse (1961-2008) as well as maximal annual discharges at the station id v. Radusha (1951-2008) and the station in v. Jegunovtse (1961-2008) were analyzed. Flood waters with return periods were computed to define the effective discharges for river regulation design. The results from these analyses are shown in a tabular and graphic form.