This study is undertaken in Kilie watershed area found in Lume woreda, Oromia Regional State.rnThe paper focused on analyzing the factors that influence the adoption of soil bund on grainrnproduction using cross-sectional data collected in 2007 on randomly selected 141 householdsrnhaving 520 plots. The data included in the analysis comprises both socio-economic factors atrnhousehold level and biophysical variables atfarm plot level.rnProbity and impact evaluation econometric models were used to determine the factors affecting thernadoption decision behavior of the farm household and the impact of adoption on grain productionrnrespectively. The result of the probit model showed that sex of the household head, farmingrnexperience, training on soil and water conservation practices, land size, plot slope, labour-landrnratio, size of livestock, person-land ratio and distance of plot from residence found to be significant.rnIn the second model, the regression analysis was run by classifying the crops grown by the farmersrninto three categories: for the whole crops, for the main crop (tejj) and other crops (excluding teff).rnThe result indicated that in all of the three cases the impact of adoption of soil bund on croprnproduction has positive sign, however, it was significant (at 5% level of significance) only for teff. Inrnthe case of whole crops and other crops, the variable soil and water conservation practice is notrnsignificantly different from zero. The other variables that have significant influence on the value ofrncrop production include: sex of the household's head and the major factors of production (fertilizer,rnland size, family labor and draught power).rnTwo main policy implications can be emerged from the study. To expand the adoption of thernconservation practice the government should strengthen the program in the area. To encourage thernprobability of adoption and intensity of use, research on improved soil and water conservationrntechniques should play attention to the provision of tangible short term benefits. The second is tornstimulate the adoption of soil and water conservation practices farmers should be provided withrnshort term training. The training will help them to use the technology effectively and in sustainablernway.