Smallholder rain-fed agriculture is the mainstay of the majority of the population in Ethiopia.rnHowever, the performance of the sector is very poor particularly in the drought-prone parts of therncountry. Small scale irrigation has been introduced to overcome climate variability inducedrnlivelihood challenges of farm households; Central rift valley of Ethiopia is known for its long timernexperience in irrigation. This research aims to examine the environmental and socio-economicrnimpacts of small scale irrigation in the Central Rift Valley of Ethiopia. Household survey,rninterview and soil and water laboratory testing were used to collect primary data. About 259rnirrigation users and 172 non-irrigation user households were selected for the survey. Conveniencernand snowball sampling methods were used to select interviewees. The study showed that irrigationrnuser households have higher gross income and farm income than non-irrigation users (P< 0.01rnand P13 at EC< 4ds/mrnindicates the sodic nature of the water. Accordingly, the groundwater chemical composition (ESPrn= 63.3, SAR = 116.28 and EC= 1.973), showing the sodic type of the water at Bochessa site. Thus, thernstudy proofed that the type of the irrigation water affects the quality of the soil (farm lands irrigated usingrngroundwater have high ESP (ESP=29.7)) and the soil is categorized as sodic soil. Sodic soilsrnadversely affect plant growth mainly hindering the osmotic process and diminishes the economicrnprofitability. The study further revealed that small scale irrigation enhances agriculturalrnproductivity, serve as a source of diversified food, creates employment opportunity, means to copernup with the effects of climate variability, and increases household asset and income. However, thernprevalence of pests and diseases, degradation of natural resources, and biodiversity modificationrnare some of the negative effects of irrigation. Water scarcity and associated conflicts for water usernfound to be a serious problem due to the high demand for water from multiple users. Thernsustainability of irrigation-based livelihood is gloomy in the study site due to farmersâ€™ limitedrnaccess to livelihood capitals, unequal participation of women farmers in irrigation, and lack ofrntransparency of irrigation institutions. The study suggested that creating market linkage,rnincreasing accessibility of rural financial institutions, introducing gender-sensitive irrigationrntechnologies, adopting of water-saving irrigation technologies and ensure equity in irrigationrnwater use as key approaches to enhance the sustainability of irrigation. The study furtherrnrecommends assuring sustainable rural livelihood agricultural policymakers and practitionersrnshould focus on improving the performance of both rain-fed and irrigation. The study suggestsrnsome future researches to be conducted on the effects of SSI farming on human health andrnbiodiversity change and how the environmental impact assessment is implemented by large scalernirrigators in the CRV of Ethiopia.