Today, the major challenge facing the Government of Ethiopia is how to achieve food security and reduce poverty through expanding new technology among rural households. So, the agriculture office has been promoting improved forage technologies for long time. Yet their widespread uptake by small-scale farmers was not as expected, and also studies focusing on the impact of Rhodes grass forage development are scanty. The main objective of the study is to evaluate the impact of Rhodes grass forage development on the consumption expenditure per adult equivalent and income per adult equivalent of rural smallholder farmers. In addition, the study investigated the factors affecting the adoption and intensity of use of Rhodes grass on sample smallholder farmers. Multistage sampling technique was employed to select sample respondents. Both primary and secondary data were collected in the study. Primary data was collected using KI interview, focus group discussions and cross-sectional survey from 300 sample households(116Rhodes grass adopters and 184 non-adopters). Descriptive statistics, inferential statistics, Double hurdle model and endogenous switching regression model were used for analyzing quantitative data.The endogenous switching regression model revealed that adopters’ consumption expenditure per adult equivalent and income per adult equivalent increased by 41.21 percent and 43.92 percent respectively. Furthermore, results from Double Hurdle model estimates show that farm experience, educational status, gender, age of the house hold head ,farm size, yield perception, training, access of credit, distance of input market and attending of field day affect significantly the adoption and the intensity of use of Rhodes grass. The study concluded that Rhodes grass forage is one of the viable solutions to improve the livelihood of smallholder farmers in the study area by increasing income from livestock. Reaching the poor with better livelihood status however requires policy support for improving extension efforts; access to credit and market infrastructures that simulate Rhodes grass forage adoption thereby improves their livelihood. Key words: Rhodes grass, livelihood, consumption expenditure, income, endogenous switching regression, Ethiopia.