LULCC is the quantitative changes in the area extent that is increase or decrease of a given typernof LU and LC. In Ethiopia LULCC has been recognized as an important driver of environmentalrnchange in the country. Therefore a systematic analysis of LULCC is so crucial in order tornunderstand the extent of the change and take necessary measures. The main objective of thisrnstudy was to understand the LULC dynamics of Chi/alo Mountain and its environs. Morernspecifically, the study analyzed the LULCC over the past 38 years, assess the impact of LULCCrnon biophysical and socioeconomic factors and identifY drivers of LULCC in the study areas. Thernstudy has made use of sequential satellite images (1973, 1986, 2000 and 2011) and the analysisrn" carried out using RS and (GIS) in conjunction with field verifications. Moreover socio-economicrnsurveys were also used to interpret the drivers of LULCC and associated negative impactrnoccurring on both biophysical and local community. Accordingly the LULCC analysis showedrnforestland is continuously decrease during the three comparison period i.e. (1973-1986), (1986-rn2000) and (2000-2011) with (20.54 %), (19.61%), and (28.24%) re;pectively. On the other handrncrop land showed continuous increment by (9.87 %), (5.92 %), and (59.86%) during the threernperiod. The remaining LUiLC class showedjluctuation, thus increased one period and decreasedrnon other period. The major causes of LULCC in the study area are; deforestation, agriculturalrnexpansion, scarcity of farm land, demand for wood, population growth, and fire hazard. Thesernleads to distraction of natural resources such as reduce the availability jlora andfauna, soilrndegradation, climate change and decline of water resources. It also negatively affects the localrn:l community through decline livestock number; increase reliance on chemical fertilizer, shortagernof water, wood and medicinal plants. Thus in order 10 alleviate the problem possible measurernmust be taken such as control rale of population growth, agro-forestry, aforestation &rnreforestation, creating off farm job opportunity etc must be undertake.rnKey words; land use/land cover, Land use/ land cover change, satellite image, RS, GIS.