The thesis presented the results of an investigation into livelihood strategies of ruralrnhouseholds in the Hararghe Highlands in the context of population pressure. Thernhuman welfare and respurce outcomes of rural livelihood strategies were assessed,rnaccounting for the 'mediating' factors . The study enriches the current policy debaternon how to create an enabling environment to strengthen sustainable rural livelihoodsrnand mitigate adverse welfare and resource consequences of unsustainable ruralrnlivelihood strategies.The sustainable livelihood framework for analysing rural livelihoods in the context ofrnpopulation pressure was modified in the thesis to guide the analyses. Primary datarnwas obtained from 197 randomly selected households from three representative sitesrnin the Hararghe Highlands . Whilst verbal des cription, interpretation and appreciationrnof facts, and case studies were used for the qualitative data analysis , multivariaterntechniques and logistic regression were employed to analyse the quantitative data.The study showed that subdivision and fragmentation of agricultural land and reemergencernof landlessness have accompanied the unprecedented population growthrnin the Hararghe Highlands. The pace of demographic change of the area is so fastrnthat it has caused failure of indigenous countervailing and adaptations. Sufficientrneffective demand for sustainable intensification of smallholder farms has, however,rnnot been created due to uncertain right to the land and inadequate market incentives.rnFurthermore, the technology generation and dissemination systems have failed tornbuild the capacity of smallholder farmers to respond to the demographic pressure inrna sustainable way. This has generally resulted in negative welfare and resourcernoutcomes.rnNonetheless, rural households pursue heterogeneous livelihood strategies due torndifferential access to livelihood assets, and heterogeneous constraints andrnincentives. The nature and the extent of welfare and resource outcomes of ruralrnlivelihood strategies are different across sites and among different households. Arnlivelihood strategy that integrates cash crop production with high external input-basedrnstaple crops production and trade was found to be more successful. Overall, thernfindings challenge the current untargeted and uniform intervention that implicitlyrnassumes that only farming and the intensification of staple crop production for foodrnself-sufficiency is important to all households. Furthermore, the findings challenge thernover simplified generalisations regarding the human welfare and resource effects ofrnrural population growth in Ethiopia as if the interactions between them were takingrnplace in a political, an institutional and an agro-climatic vacuum and as if ruralrnhouseholds in a district, a sUb-district or a village were a 'homogeneous' group.rnWhat is thus needed is decentralisation of rural development planning and building ofrnthe capacity of local institutions so that they may be able to understand ruralrnlivelihoods and design innovative and locally specific integrated interventions tornsupport sustainable rural livelihoods. The specific recommendations include ensuringrnland tenure security, improving farmers' access to the market and appropriaterntechnologies, creating conducive environment for commercialisation and livelihoodrndiversification , institutionalised safety net, resettlement and family planning