In Ethiopia, the majority of the rural population livelihood depends on agriculture. However, land degradation caused by soil erosion, overgrazing, deforestation and poor agricultural practices are undermining the very resources. Now more than ever, knowledge of the trends of landuse/landcover change and dynamics and the process of soil erosion, their causes, and their impact on such fragile environment must be a priority issue in order to devise effective control mechanisms and suitable land management practices. Hence, this study attempted to identify and quantify the major landuse/landcover changes over the past 32 years (1973-2005) as well as to estimate the rate of soil erosion using the Revised Universal Soil Loss Equation (RUSLE) in combination with Remote Sensing and GIS.