Karst hydrological investigation of the sinking stream problem of the River Zrmanja is presented. The aim of this analysis is to assess the feasibility of constructing three hydroelectric power plants (HEPP) along the River Zrmanja course. This paper presents a suitable and simple hydrological methodology that can be applied to scarce available data obtained on complex karst terranes. The paper presents a complex but common case of water circulation in a karst system. The primary objectives of the investigations were: (a) to analyse the underground karst connections, (b) to analyse discharge conditions along the River Zrmanja, and (c) to define variations in the catchment area along the River Zrmanja. The fact that the hydrological regime of the River Zrmanja is highly variable, due to the water losses along the open streamflow, strongly influenced the selection of the locations and heights of the HEPP dams. In spite of many hydrological, meteorological and hydrogeological measurements, the River Zrmanja catchment is insufficiently gauged. This dictates the use of a simple, empirically-based hydrological methodology. The Turc (1954) and Coutagne (1954) formulas were used in determination of annual total runoff. Using these simple hydrological methods, some important engineering answers were obtained. This is a first step towards application of sophisticated hydrological models, needing large amounts of reliable data.