The downstream low lying region of the Kelani River including the Colombo suburbs, experience severe inundation due to localized heavy rainfall events and high precipitation in the upper basin. Under the impact of climate change it is very likely that more frequent heavy rainfalls in tropics [1] will occur. Therefore it is extremely important to have a better understanding about future rainfall patterns and intensities in the basin and inundation extents of the low lying regions characterized by high population concentration and economic activities that form the suburbs of the commercial capital. This paper presents the extreme rainfalls occurrence potential and resulting flood inundation along the lower reach of Kelani River. Coarse grid atmospheric parameters provided by GCM models for A2 and B2 scenarios of IPCC [1] are downscaled to catchment scale by the application of Statistical Downscaling Model (SDSM). Flood discharge and inundation along the Kelani River reach below Hanwella was analyzed by the application of two-dimensional flood simulation model (FLO-2D). Inflow to the model at Hanwella, is estimated by the HEC- HMS model under future extreme rainfall events. Areas vulnerable for inundation under the above climate change scenarios are presented.