The Addis Ababa city administration, under proclamation No.3, 1994, established a leasernholding system according to which investors can lease land areas for commercial andrnindustrial use . The leased areas are acquired through conversion of agricultural andrngreen land occupied by the farmers living in the surrounding of Addis Ababa . Althoughrnthe city administration believes that the lease land allocation system boosts the marketrnvalue and proper exploitation of urban land , most of urban expansion projects tend tornaggravate the periphery people's impoverishment .rnThroughout its history Addis Ababa city has undergone a horizontal expansion pattern.rnPresent expansion program implemented by the city administration is throughrnintervention projects that are large in scale and size. Meri kebele 16 is one of thernperiphery areas in the city where large projects of residential expansion are beingrnimplemented dislocating the farming community from their land This study mainlyrninvestigates the effects of the expansion of the city on the socio-economy andrnenvironment of the dislocated farmers from Meri To fulfill the above objective,rnhousehold survey, participatory group discussions, key informants interviews andrnobservation were used to assess the situation. The results of the study indicated that thernexpansion program implementation was not participatory and have impoverished thernfarming community. The compensation paid to the dislocated was very low to rehabilitaternthe farmers and negatively affected the livelihood of the dislocated farming community.rnBetter access to school, electricity and clean water are the few benefits which arernacquired as a result of urban expansion. The permanent plant coverage is redu cing fromrntime to time which results in soil degradation and in addition as a result of improperrnwaste management the area is getting polluted. Furthermore, the study revealed thatrnwomen and children are major victims to livelihood cnsls. The copingrnmechanism/strategy adopted by the majority of the dislocated farmers is casual that isrndaily labor, traditional alcohol selling, small trade and farming . Expansion program thatrnmay be proposed on, the periphery in the future needs the participation of therncommunity in planning and implementation; so as to reduce the negative effects ofrndislocation program on the farmers socio-economy and environment.