Watersheds around Addis Ababa are critically threatened by rapid urbanization expansion. This study aims to explain the rate of urban expansion and interaction with communities around the city. GIS and RS were used to evaluate the Land use and Land cover changes and urban expansion in the last 30 years using Landsat images and selected households. Results revealed that agricultural/bare land increased by 29.02% from 1984 and 1999 but the land use decreased by 4.3% between 1999 and 2014. Grazing land decreased by 83.2% between 1984 and 1999 and declined by 26.4% between 1999 and 2014. Built-up area, were increased by 31.2% between 1984 and 1999, and a later increased by 117.5% between 1999 and 2014, Water bodies decreased by 47.94% between 1984 and 1999 and declined by 27.4% between 1999 and 2014. Forest decreased by 11% from 1984 to 1999 and similarly reduced by 22.8% between 1999 and 2014. 74.8% of the participants involved responded that they have lost their land because of the urban expansion. More than 80.5% of the respondents confirmed that the compensation given at the expense of the farmland loss -reported not satisfactory. They reported that they were strongly dissatisfied with the compensation scheme. This study concluded that rapid urbanization was the driving force for land cover and land-use change in the Addis Ababa watershed. The findings are vital for sustainable urban land use and landscape planning decisions as well as projecting possible future changes.

Keywords: Addis Ababa, Geographic Information System, Land Use and Land Cover Change, Remote Sensing, Urbanization