Evaporation is one of the largest water losses from most of the dam lakes in Iran. Estimating the evaporation rate enables us to apply the proper evaporation mitigation technologies. In this study, the feasibility of different evaporation estimation methods was studied to find an optimum method with a fair tradeoff between cost and accuracy. The optimum method may vary depending on the climate. We found Penman, Montieth and Unsworth (PMU) method as the optimum estimation method applicable Karaj dam lake (located north west of Tehran, Iran). For validation, we used the filed measurements for 2005. The reason is that the PMU is highly sensitive to wind velocity and only for 2005 the meteorological data contained the wind velocity. For the sky clarity, we used the 22-year average sky clarity of Karaj dam lake in augusts (i.e. 80%). The PMU model is found to provide consistent results with filed measurements (less than 2% error). For example, from 2 nd to 15 th of August 2005, the PMU model predicts 7.98 ± 0.83 mm/day evaporation and field measurement for the same period was 8.13 ± 0.01 mm/day.