Floods are one of the most destructive natural disasters which compensation of their effects inflicts immense costs especially in areas with human developments such as cities. Moreover, supplying water for demands particularly during the drought period is a challenging issue in water resource planning. The aim of this study is to propose a model for optimal operation of a reservoir with enhancing downstream demands supply and flood damage mitigation objectives. The model is developed by coupling MODSIM, river network simulation DSS with the imperialist competitive optimization algorithm (ICA). Gotvand Dam in southwestern Iran is the case of study and amounts of water storage in the reservoir in daily time-steps are the decision variable. Results indicate efficiency of the proposed optimization-simulation approach, suggesting that flood damages can be controlled with proper planning while ensuring that downstream water demands are satisfied. As an instance of results, the optimum reservoir rule curve obtained by the proposed model is able to manage a flood entering to the reservoir 11 times greater than the safe flow in the downstream reach and release it lower than the safe flow rate.