Lake Tana Basin development corridor (LTSBDC) is a corridor in Amhara region which covers an area of about 1.5 million hectares. The area is known for the variety of annual and perennial crops grown, its breeds of livestock and diversified vegetation, and especially its forest resources. In the years between 1986 and 2013, both built-up areas and cultivated land cover increased. This indicates that, due to expansion of cultivated land and human settlements , the natural forest land cover declined. Similar to natural forest, grassland cover was also found to decrease. Land use and land cover change and consequent land degradation in the Lake Tana watershed limits the potential to develop a sustainable livelihood for its inhabitants. The effectiveness of the regional and local efforts to improve the environment and livelihoods of the residents in the Lake Tana watershed through natural resource conservation programs are limited due to capacity and financial barriers. Land use and water resource related barriers that were identified include weak policy implementation, low capacity (technical and financial), poor information management system, low or no incentives, and frequent restructuring of core and principal institutions at national/regional levels. Alleviation of these constraints will be important for better delivery of technical support and enabling local users to implement good land use related practices, to influence policies; reduce dependency on aids and implement environmentally friendly watershed management activities; terraces, gully rehabilitation check dams and alley cropping as biological measures.