The study aimed at evaluating the impact of integrated watershed management on reducing soil erosion and changes in the livelihoods of rural farming households in Ethiopia. The changes in soil erosion for the years between 2002 and 2015 were estimated using the Revised Universal Soil Loss Equation model, while the impacts on livelihoods were assessed by household interviews. During the study period, the overall average annual soil loss was halved. Furthermore, crop productivity, water availability (irrigation and domestic) and fodder availability increased by 22, 33 and 10％, respectively, while an increase in household income (by 56％) was observed. Moreover, 72％of the sampled households were able to cover their 12-month annual expenditure demands in 2015, while only 50％ of the households were able to cover these demands in 2002. It can be concluded that the implemented integrated watershed man-agement activities seemingly resulted in reduced soil loss, enhanced vegetation cover, and additional household income. This paper also elaborates on the hurdles for integrated watershed management expansion.