In recent years, climate change and its impacts on livelihood resource have become a key issue inrnEthiopia. The main undesirable impacts on livelihood resources include land degradation, soilrnerosion, deforestation, loss of bio diversity, recurrent drought, flood, wet land, and water bodyrndlying, and emergence of new crop and animal diseases. All these contribute to food insecurityrnond subsistence farm ing with a difficulty to break through the poverty trap. Thus this thesis hasrnottempted to examine how community based watershed development project has a signijlcantrnimpact to reverse the aforementioned undesirable impacts, and will contribute to the developmentrnof climate change adaptation mechanisms, adaptive capacity, and livelihood improvements. Thisrnthesis has also made the objective of assessing the positive impact of community based watershedrndevelopment project on the development of climate change adaptation mechanism and livelihoodsrnin Choke Mountain in the case of Upper Muga Ambaber Community Based WatershedrnDevelopment Project. To address the investigation and assessment of the above objective thernresearch method uses both qualitative and quantitative types of research design. In order torncollect valuable information while semi structured questionnaire, focus group discussion guidernchecklist, key informant guide checklist, and observation check list tools are used The primGlyrndata sources considering such things in the sampling process as gender, age, wealth status andrnCBO membership document review format is used to quick handling of the required documentsrnas a secondGlY data source. Similarly, different statistical methods are usedfor the data analysis.rnThese include percentage offrequencies, bar graphs, X test, independent and paired sample ttestrnand one way ANOVAs. The key finding of the thesis presents that the adaptive capacity of thernarea before the intervention was low/very low. However, afler the intervention the status ofrnlivelihood resources especially; income, soil fertility, land productivity, forest, water and foodrnsupply become improved, (biophys ical and financial resources). Even if it has some gaps in thernprocess of implementation such as lack of participatory decision making process, targetingrnproblem to address the poor, the young and the women, weak stakeholder linkage and somernconflicts over utilization of communal livelihood resources (forest and range land), which meansrnlacks for the development of social and human capital. It is concluded that the project can playarnsignijlcant role to improve the adaptive capacity and livelihood condition of the local people.rnThen to fill the gap and go along the sustainability of the project, the investigation recommendedrnji'equent negotiation and lobby from the concerned stakeholders to improve human and socialrncapital and solve the confiict. Then the project stakeholders shall think to retarget for the benefitrnof disadvantaged group.rnKey wards: Community based organization, vulnerability, adaptation, and adaptive capacity