The study was conducted in Sebeta town and its hil1lerland. The main Objective of the study was to assess thernRural-urban Linkages and their Implications on Livelihood Diversification at Household level in the study area.rnThe research employed cross-sectional survey.design and used multi-stage sampling techniques to select targetrnpopulation through stratified probability sampling techniques. The data was collected ji-om 200 sampledrnhouseholds. In order to col/ectthe data both quantitative as weI/ as qualitative methods were employed. Regardingrnquolilalive method FGDs. in depth-interview, and direct personal observation l~las employed. The householdrnsurvey is the most importal1l lIIethod used to col/ect quantitative information ji-om salllpled households. The datarnlI 'OS (Il1a~l'::ed 'hrough holf! qU(IIl /i/o/h'e und quali/lIIi'e methods which were gUided by the proposition that 'ruralrnand urban areas are interdependent spatial units ' as a ji-amework. Accordingly, linkage can be manifested in thernflows of agricultural products. flows of agricultural inputs and industrial goods, flows of people and remittance,rnflows of information. flows o/finance and urban related nOlI:farlll activities.rnThe findings of the study are concemed: fal'lIIers in the rural kebeles are not market oriented as a resultrnugricullllmi output did not satiyfjÂ· the dellland of sOllie of urban residel1l.Â· in Sebeta. The main products brought tornthe town are te.o: wheat and pulses. In this regard, hinterland farmers have shown relatively strong marketingrninteraction with urban dwellers than urban ti-aders. The study also shows consumption linkages in terms ofrnexpenditure on urban goods and selected social services. The study shows there is similarity between hinterlandrnfarmers and their urban counterparts to recognize and identify pertinent challenges thai hamper RUMLs. ThernS flf(~l' hlls idelf'iffed weak hackll'"rd and/orw(tl'd production marketing linkage pal't/clllal'~v Ihe laler is almost nonexistent.rn71,e rUl'o!nol7:/cml7 sec/Or is prolllising Il'itli IIlOl'e than huif ofsulllpled farmers taking part in the activityrnas their livelihood inCOllle sOl/rce though it has undes irable effect. On the other hand, 1II0re than two-third ofrnsalllpled urban households eam all income ji-Olll a combination of activities. In terms of labor mobility, thernmajoritv of mi"rants are va un" population. Migration has also played an important role in livelihood in terms ofrnrell/j((unce a lld i/ ~!(}"I11Uf jOil for 1'/1,.0/ hO llsehold~' . though it causes farm labor shortage. Urban dwellers go withrntheir finance and skill to engage in rural f arllling as a result there is a transforll1ation of knowledge and flow ofrnfinan ce in the study area.rnThe urban trader survey revealed that the town is used as a collection center of both agricultural productsrnproduced by the hinteriandf arlllers and industrial pl'Oductsji-om Addis Ababa. The urban traders in the study siternrun their business with lilllited capital and the business is lIIanaged by the family with f ew hired labor. However,rnthey play an important role in connecting the hinterlands with the town and capital citv.rnFinolfl', there are sO/J/ e policy implications that eJJ1anate from the study in order (0 strengthen rural-urbanrnlinkages and bring reciprocal relationship in the study area. These are: expansion infrastructure particu/arlyrnfeeder l'Oad transport develol'lI1ent. creating access to credits f or poor f armers, encouraging traders to supportrn/amers in provision of creelit and information and prc))'is iOI/ of skill training/or non:farm participants.