Now a day, the notion of investment in agricultural sector intends to increase production andrnproductivity of agriculture, create employment opportunities, and enhance local revenue.rnAgricultural investment is expected to improve the living conditions of local communities andrnensure efficient utilization of natural resources. However, in the study area the effect ofrnagricultural investment on local communitiesâ€Ÿ livelihood and environment was not wellrndocumented. This study, therefore, examined the impact of agricultural investment on localrnlivelihood and environment in Guba woreda, Benishangul-Gumuz Regional State. Bothrnqualitative and quantitative research methods were employed in this study. Quantitative datarnwas derived mainly from structured questionnaires administered to households, and qualitativerndata was analyzed through review of documents and smi-structured and unstructured in-depthrninterviews with key informants. Systematic random sampling technique was employed to drawrn150 household heads from Aysid kebele in Guba woreda. To analyze the implications ofrnagricultural investment on local communitiesâ€Ÿ livelihood and environment, specific statisticalrntests Chi-Xrn2rnand T-test were utilized in the study. In addition to descriptive statistics, multiplernlinear regressions were employed to estimate the effect of some explanatory variables onrndependent variable. The regression result revealed that 31% variation in dependent variable isrnexplained by independent variables. To supplement the survey data, a remote sensing satelliternimage data (landsat5 and sentil2) was collected with ground verification. Based on this, the landrnuse or vegetation cover change map or image was analyzed by employing Arc GIS10.5 softwarernto calculate the NDVI values. Unlike the theoretical hypothesis, the time series result indicatedrnthe trends of production and productivity of small holders farming is declining and the averagernfiscal revenue share of agricultural investment is insignificant (7%). Concerning employmentrnopportunities, out of 167 functional projects, 102(61%) investment projects created 2,428rnpermanent and 44,476 temporary job opportunities for communities. Out of these the share ofrnlocal communities in both permanent and temporary employment is 8% and 33% respectively.rnOn the other hand, the local communities in sample kebele claimed that agricultural investmentrnhas potential threats: deforestation (82%), dispossessions of land (75%), mal-practices (86%),rnviolent conflict (77%), and increase charcoal production practices (80.1%), and increase thernincidence of forest fire (64%). In relation with overall transformation of land escape the surveyrnresults in the study indicated that land use or cover change is severely increasing from time torntime. The satellite image analysis indicates intense land use dynamics over the past threernreferenced years (1990-2000, 2000-2010 and 2010-2019). The result revealed that the forest orrndense woodlands reduced by 1% per year in the 2010-2019 periods. Crop lands increase onrnaverage by 26%. However, the rate of increment per year was higher in the 2010-2019 timernperiods. The increment is 2.6 % per year and it is on the expense of dense and open woodlands.rnFurthermore, the survey results indicated that the major causes for conflict between localrncommunities and investors: increasing land less migrant communities 86(63%), lack of localrncommunitiesâ€Ÿ participation in land dealing 94(69%), practices of informal land rentingrn113(83%), and 121(89%) encroachments in investment farm land by local communities. Basedrnon the findings it is recommended that in agricultural investment process land identification,rnpreparation and land transfer to investors has to be done along with the local communitiesâ€Ÿrnconsultation and participation to minimize the adverse effects of investment projects.