Accurate information on land use and land cover change (LULCC) is critical for understanding the causes of change and for developing effective policies and strategies to slow and reverse land degradation. In Ethiopia, the speed and scale of LULCC has been accelerated in the last 3-4 decades of the 21st century. The objectives of this study were to assess: (i) the extent of LULCC and normalized difference vegetation index (NDVI) and the link to land degradation; (ii) the causes of LULCC and implication for climate change adaptation. Satellite images analysis was used to detect the change in area and vegetation index, and farmers’ perception to see the magnitude of LULCC dynamics and causes of deforestation. Correlations were made between vegetation index with dry season rainfall and temperature. The analysis of confusion matrix of LULC classification showed 87% accuracy with Kappa coefficient of 0.84. In the period 1986-2016, agriculture and settlement areas have increased by 250% and 618%, respectively. On the other hand, forests and woodlands have decreased by 72% and 84%, respectively. These were also validated with the farmers’ quantification results with similar trends. Different causes have played roles in the dynamics of LULCC. The results showed that vegetation dynamics vary both spatially and temporally against precipitation and temperature. This study informs the need to focus on halting deforestation and development of alternative energy sources. It further helps to design future land management directions, landscape based adaptation and rehabilitation strategies to be considered by policy makers.