The study was envisaged with the objectives of investigating extent and determinants of rural livelihoodrndiversification at household level and exploring contribution and constraints of irrigation for ruralrnlivelihood diversification in Gubalafio Woreda taking Alawuha small-scale irrigation as a case. For thisrnpurpose a two- stage stratified sampling procedure was employed to select 113 sample households fromrntwo sample kebeles. Data were gathered using structured questionnaire, FGD and key informantsrninterview through semi-structured checklist Extent of household livelihood diversification was estimatedrnusing livelihood diversification index and it revealed that out of the total 133 sample households, 61rnhouseholds (54%) were found in the lowest income quartiles(less diversified) groups while the remainingrn52 households (46%) were found in the top income quartiles (diversified). Descriptive statistics andrnbinary logit regression model were employed for analysis.rnThe results of the study showed that onj'arm, off-farm, non-farm, employment and migration were thernmajor livelihood activities and income sources of sample households. However, there are importantrndijJerences in the number of income sources and amount of return among sample households. The binary logitrnmodel results disclosed that among 17 explanatory variables included in the model, six (income fromrnemployment, farm experience, distance to market center, income from irrigated land, total size of irrigablernland and income from offj'arm activities) have significant effect on household livelihood diversification.rnSmall-scale irrigation has a vital role on rural household livelihood diversification but the study disclosedrnthat Alawuha irrigation scheme has constrained by different technical, management and socia-economicrnproblems. These calls, policy interventions that are spearheaded by the government in order to enact,rnimplement and follow up poliCies geared towards sustainable use of the scheme. Moreover, due attentionrnand policy consideration has to be given by government to those Significant variables which have arnpotential impact in determining household livelihood diversification in the study area.