The study assesses the extent of household vulnerability to climate change by applyingrnVulnerability as Expected Poverty (fIEP) approach. The VEP approach is based on estimatingrnthe probability that a given shock or set of shocks moves household consumption below povertyrnline or force them to stay there if they are already below poverty line. The data is collected fromrnrural farming households in Adama and Lume Woredas of East Shewa zone during 2009rnrnproduction season. The result shows that about 68 percent of farmers are vulnerable to poverty,rnwhile 62 percent of them are observed to be poor. A bout 52 percent of the households arernvulnerable to poverty due to low consumption prospect and 16 percent of them are vulnerablerndue to high consumption volatility. The study also indicates that change of rainfall andrntemperature from long run averages, frequency of drought and soil characteristics are majorrnreasons for farmers' vulnerability to poverty. On the other hand, education of head, livestock andrnland size, irrigation size, quantity of fertilizer used and number of extension contacts are found tornreduce household vulnerability to climate change. Proximity to facilities such as road and marketrnalso reduces farmers' vulnerability. But, higher family size and exposure to non climatic shocksrnsuch as death of household head and input price rise increase vulnerability. On top of that, thernestimated incidence of poverty is less than the fraction of population that is vulnerable to poverty.rnrnThis calls for differential intervention for poverty reduction and poverty prevention, in additionrnto consumption stabilization and increasing measures. On the other hand expansion of extensionrnservices, irrigation practices, non farm income opportunities, improving farmers' access tornfertilizer use and increasing household capacity to cope or mitigate shocks and risks arernimportant intervention areas to reduce vulnerability.