Land degradation, which includes degradation of vegetation cover, soil degradation and nutrientrndepletion, is a major ecological problem generally in Ethiopia and particularly in the study area.rnAs a response of the ever expanding land degradation, rehabilitation of degraded lands throughrnclosed areas has been practiced in the study area. Despite this concern, there are relatively fewrnstudies in the study area, which would provide a measure of usefulness of closed areas as onernstrategy to help prevent decline of soil degradation and thereby increase agriculturalrnproductivity. A field study was conducted in the Busuqi and Gubesay Peasant Association ofrnAdaa'a wereda, Eastern Shewa zone, Oromia Region of Ethiopia to assess the effects of arearnclosure on soil nutrients and on gully and sheet erosion. To this end enclosure sites are comparedrnwith other land use types (free grazing land) in similar landscape positions for soil fertilityrnbuildup, sheet erosion, and gully erosion. Soil samples were collected accross two parallelrntransects from the three land use types. Status of degradation of different land use types; youngrnKelala enclosure, free grazing land and old Biyo enclosure, was assessed using SOM, CEC, TN,rnPH, AP, AK, BD, gully parameters and sheet erosion rate . Degradation Indices were computedrnfor young Kelala enclosure and free grazing land through comparison with the old Biyornenclosure. The rate of soil loss through sheet in the study area was determined using erosionrnPins. Five and twenty one year closed areas had significantly (p < 0.05) higher levels for SOM,rnCEC, TN and AK compared to free grazing lands. The soil physical properties such as bulkrndensity, showed notable variations, particularly due to different land use system. The highest bulkrnwas recorded in the free grazing land, whereas the lowest was in old Biyo enclosure. AK was thernmost deteriorated soil parameter with values of 35.25 (%) and 47.31(%) for young Kelalarnenclosure and free grazing land respectively. SOM was the next deteriorated soil parameter withrnvalues of 44.05 for free grazing land. TN was the next deteriorated soil parameter with valuesrnof 26.92 (%). Among the two land use types selected to be studied, free grazing land was thernmost degraded one with a degradation index of -150.95% with respect to the old Biyo enclosure.rnThe calculated soil loss using Pin method indicated that there is significant difference (p < 0.05)rnbetween Kelala Dalacha closed areas and adjoining free grazing land. Gully density of 14m/harnwas recorded in the enclosed side and 28m/ha in the free grazing side, which implies that thernsampled farm land bellow enclosure area was severely degraded and sampled farm land bellowrnfree grazing land was very severely degraded. The soil loss by sheet erosion was 0.37 mm /yr andrn1.68 mm /yr for young Kelala enclosure and free grazing land respectively. The overall outputrnfrom the research showed that chemical and physical soil properties in enclosure areas withrnrestoring vegetation are improving that enclosures act as important sinks of water and reducernsoil erosion and as such contribute to soil and water conservation. If appropriate interventionsrnare not carried out in the free grazing land for the future, the soil nutrient deplition extent andrnsoil erosion rate would escalate and reversing the process would become difficultrnKeywords: land use, closed areas, free grazing land, soil nutrients, erosion, Pin, gully density