The study assess es the extent of rural household vulnerability to climate change by applyingrnVulnerability as Expected Pover ty (VEP) approach and analyses adaptation options used byrnapplying multinomiallogit model. The VEP approach is based on estimating the probability thatrna given shock or set of shocks moves household consumption below poverty line or force th em tornstay there if they are already below pove rty line . Multinomial logit model is based on th ernprobability that households choices one method Fom multiple options to adapt to the negativernimpacts of climate change. Th e data was collected Fom rural ftlrming households in Kuyu,rnDegem and Wara Jarso Woredas of North Shewa zone of Or0111ia regional state during 2011rnproduction season. The study r esult indicates that Fom the total sample household 62. 5 percentrnof the them are vulnerable to poverty, whereas 59.17 percent of them are poor. Moreover thernsources of vuln er ability indicates that about 52.92 percent of the households are vulnerable tornpoverty due to low consumption mean and about 9.58 percent of them are vulnerable due to highrnconsumption in stability. It was also observed Fom the study result that hOllsehold head age,rngender of household head, education level, land size, livestock size, farm income, non-ftlrmrnincome, irrigation size, ilrub , fertilizer use, insecticide and pesticide use and adaptation reducernhousehold vulnerability to climate change, whereas family size, idir und mahiber lend tornincrease household vulnerability to climate change. Access to extension services, all weatherrnroads, credit and market also reduces household vulnerability to poverty. The adaptationrnmethods identified include use of irriga tion, change of planting date and plough system, use ofrntraditional and improved crop variety , and innovative adaptation method. In this study level ofrneducation, gender, age, land size, fttrm in come, nonfarm income, livestock size , access to credit,rnaccess to market, access to extension, access to all weather roads and social institutionrnconsidered as ftlctors that influence the farmers use of adaptation method. The analysis revealsrnthat these variables influence ftmners' use of adaptation method. This study sugges ts that raisingrnawareness of climate change, encouraging farmers to use different innovative adaptationrnmethod, increasing availability of improved crop and livestock species, expansion of irrigationrnuse, non farm income opportunities, access to credit and extension services are possiblernintervention areas to reduce ho usehold vulnerability.rnKey words : Vulnerability, climat e change, adaptation and vulnerability as Expected Poverty .