In Ethiopia Land Degradation has been an issue for years. This is the result of the topographicrnfeature of the country. Many approaches has been done and experimented to battle the effects ofrnland degradation. The efforts made include terracing, planting endemic trees, correcting poorrnland management and avoiding inappropriate cultivation systems. Prior consideration of thernactions were protecting the environment and maintaining its sustainability.rnThis paper; Therefore, identifies LU/LC changes of the Wenchi crater Lake, examines thernchallenges that the Lake and its surrounding environment encountered, investigates type of landrndegradation and their causes, studies how to maintain the sustainability of the lake and assessesrnthe ecotourism potentials. Finally concludes and recommends appropriate solutions to promoternthe sustainability of the study area.rnSampling size is based on the topographic contour line surrounding the Lake and covers aboutrn27,194,235.6355meter2. Both primary and secondary data had been employed. The LU/LCrndynamics of the study area are studied by gathering images of years 1973,1984,2000 and 2015rnG.c. from Land sat Multispectral Scanner, Land sat Thematic Mapper, Land sat EnhancedrnThematic Mapper plus and Land sat 8. The extracted images were analyzed by using ENVI andrnArc GIS. Based on the final output, results in percentage and colorful maps are presented andrndiscussed .Qualitative and quantitative data analysis were made from semi - structuredrninterviews and focused group discussions by SPSS software. Major challenges of the study arearnare discussed by categorizing it as Physical, Environmental, Social, Economical, andrninstitutional aspects .rnBased on the findings of the study, it is concluded that the major challenges identified are soilrnerosion, washing away of top soil, un sustainability of soil and water conservation methods usedrnand lack of availability of main infrastructures.rnFinally, the study addresses the major challenges of the study area by providing possiblernrecommendations and environmental planning solutions.rnKEY WORD: Conservation, Degradation, Ecotourism, Sustainability