The Ethiopian Rift Valley is a dry land zone where for a long time pastoral communities have made their living from acacia-based woodlands. But many pastoralists have changed from a pastoral way of life to mixed farming over time. The aim of this study was to evaluate land-use and land cover (LULC) changes in the Central Rift Valley dry lands of Ethiopia, and determine the role of drought vulnerability as a driver. A combination of GIS/remote sensing techniques, drought vulnerability analyses, field observation and surveying were employed. Because drought vulnerability is linked more closely to the types of land-uses and social contexts rather than only climatological events, it was examined based on locally perceived criteria of drought.Accordingly,thepastoral way oflife was vulnerable to severe drought during 25%ofthe last 28 years while the mixed farming (livestock and maize farming combined) system was vulnerable to severe drought only during 4% ofthe years. Over the last 5 decades, cultivated lands increased to threefold while the dense acacia coverage declined from 42% in 1965 to 9% in 2010. The observed LULC changes were driven by the interplay of recurrent drought, socioeconomic and institutional dynamics, access to markets and improved technologies such as early-maturing maize cultivars and better land management. Proper policy and technological interventions are required to develop appropriate drought adaptation strategies and avert the increasing degradation of woodlands in the Rift Valley dry lands where a pastoral way of life is still present.