This dissertation, reconstructs the role that coffee played in multifaceted changes that took placernin the two regions of southern Ethiopia, predominantly inhabited by the people of Gedeo andrnSidama. The study covers a period of seven decades, starting .from the middle of the twentiethrncentUl),. Its central theme is interaction of people and governments il1 the coffee economy, andrnreaction of people and governments to local, national and globol forces to man-made andrnnatural circumstances. 1n the course of explaining continuity and change in relations andrninteractions of people and government in the coffee economy of the regions, which is the centralrnthesis a/this research, thefol/owing sub themes such as: how Ethiopia did not care about coffeernat production level, cofTee both its production and trade facilitated integration of these twornregions to the Ethiopian State, the situation of coffee before 1974 that was dominated by nonindigenousrnsettlers and after 1974 the local agency took the leading, how the Ethiopian andrnGedeo and Sidama coffee industl), suffered under the dictation of the world coffee market,rnimposition of coffee production on the local people and little benefit they got .from it, and thernnature of coffee production, processing and marketing (small-scale production at local level byrnlocal households, and large-scale production and processing by others such as the niife/iililia,rnteke/iililla, cooperatives and associations) were discussed in nine chapters of the dissertation asrnpart and parcel of the main thesis that shows developments related to the coffee economy. Tornshow interactions and reactions of peoples Gild governments, alld to trace continuities andrnchanges in the stOl)" all sources (primw)' and secondary and written as well as oral) werernIItilized. Moreover, analyses were made to substalltiate arguments Gnd interpretations of variousrnsources. Afier employing all sorts o/sources, th e study has come to display the following majorrnfindings. OIVing to its becoming a pillar of the national export for long in the past, coffee hadrncome to experience several reforms, which affected ils prodllction, processing and marketing Gndrninteraction of the stakeholders at various levels. Besides, the onerous and continuous prices fallrnin the world coffee market appeared to have been the source of all evil in the coffee induslly,rnwhich provoked both governments of the countly and coffee farmers of the two regions to reactrnagainst coffee by responding to local, national and global dares to the coffee economy. This inrnturn became blessing in disguise for both Gedeo and Sidama coffee farmers and governments 0/rnthe country to gradually diversify their farms and export menu respectively at the expense ofrncoffee to lIIaximizetlleir income and minimize shocks that used 10 cOllie .from the world coffeernmarket.