The poor performance of the agriculture sector in feeding progressively rising population made the Government of Ethiopia and donor agencies to renew their interest on irrigation so as to address the problem of poverty and improve smallholder farmers’ welfare. As a result, there are a number of investments on small-scale irrigation in Ethiopia, in general, and Amhara region, in particular. However, there is little evidence that such kind of investment translates into poverty reduction and improvement in welfare. This paper evaluates the impact of small-scale irrigation scheme on household welfare measured by household income and consumption expenditure with specific reference to Mecha District, Amhara region. A cross-sectional survey method was used and data was collected through structured questionnaire. The data was collected from a sample of 248 households (141 adopters and 107 non adopters) using multistage random sampling technique. Descriptive statistics, endogenous switching regression and binary logit models were used for data analysis. The descriptive statistics, in this study, show that the treatment group has more household consumption expenditure and household income as compared to the control group due to their involvement in irrigation utilization. The mean annual household consumption expenditure per capita and household income per capita of the treatment and control group were about ETB 1055 and 1462, respectively, in the 2018/2019 cropping year. This significance difference more or less indicates the positive effect of small-scale irrigation scheme on households’ consumption expenditure and income in the study area. Variables which were statistically significant are; distance from local market, livestock holding, adult labour ,extension contact, age of household head, gender, scheme distance, level of education of household head and land covered by the irrigation scheme. It is, therefore, necessary to develop small-scale irrigation schemes and rural infrastructural services should be expanded to encourage households to participate in irrigation to improve their welfare. These results were suggesting that access to irrigation has profound impact on improving household welfare and living standard. Key words: Consumption expenditure, income, endogenous switching regression, small-scale irrigation, Ethiopia. vii TABLE OF