In Ethiopia, the Tigray national regional state, due to its geographical proximity to Eritrea, hasrnbeen hosting around 15,000 Eritrean refugees fleeing from their country of origin crossing thernEthiopian border starting from May 2000 because of the worse political and socio-economicrnconditions in Eritrea especially after the Ethio-Eritrean war. As large groups of people are settledrnin an area, they exert pressure on the natural environment especially in the case of refogees whererninsufficient assistance is providedfrom relief organizations. The areas of refugee settlement have arndirect bearing on the environment and the environment, in turn, has a direct bearing on the welfarernand well being of people in the vicinity. And it is not realistic to expect that the current carryingrncapacity of the refugee settlement area can withhold the increasing number of refugees. This hasrnresulted in local settlers in the area to compete for scarce natural resources which have lead to arngrowing tendency of conflict between the refogees and the locals.rnTherefore, it was crucial to examine the current natural resource degradation level, the socioeconomicrnjactors of refugees and locals towards natural resource consumption, assess the cause ofrnresource conflict and evaluate the current natural resource management practices to recommendrnpossible alternative actions and to take the lesson to similar refugee settlement areas.rnIn order to achieve the objectives, qualitative and quantitative methods were used Data wasrncollectedfrom primary and secondary sources. The qualitative aspect focused on major PRA tools,rnwhile the quantitative aspect was based on formal survey (J 50 sample households), which wasrnanalyzed using descriptive analysis, t-test and Chi-Square test.rnThe high population pressure has seriously affected and damaged the scarce natural resources andrnthe agricultural productivity of the study area. There is a serious problem of foel wood, grazingrnland and water resource scarcity which resulted due to the competition for these resources and leadrnto a conflict between rejilgees and the local population. However, Natural resource managementrnpractices taken by the concerned bodies to date were found to be minimal compared to thernenvironmental impacts. The result suggests the need for user oriented, integrated, participatOlYrnapproach to ensure sustainability of natural resource use by refugees and local communities,rnwhich is in line with the basic prinCiples of Integrated Natural Resource Management (INRM).