Land use land cover (LULC) is a fundamental variable that affects ecological services of the global environment. Land cover Changes can have far-reaching ramifications at local, regional and global levels and impact natural environment. This, paper is aimed to evaluate the land use and land cover change and its impacts on stream flow of Adama Mountain and its surrounding areas for period from 1986 to 2018. Adama Mountain covers a total area of 990 square kilometer. LandSat images MSS, TM, ETM+ and OLI/TIRS images for the period 1986, 1996, 2006, and 2018 were used for analysis of land use land cover change using ENVI 5.1 software. Additionally Fieldwork was carried out to collect data for training and validate LULC mapping from satellite images of, 2018 and for qualitative description of the characteristics of each LULC class. The land-use/cover maps of 1986, 1996, 2006 and 2018 were produced using supervised image classification technique based on the Maximum Likelihood Classifier (MLC) and minimum 15 and maximum of 28 training samples for each class. Error matrices as acrosstabulations of the mapped class versus the reference class were used to assess classification accuracy. Overall accuracy, user‘s and producer‘s accuracies, commotion and omission error and kappa statistics were then derived from the error matrices. In ENVI software, thematic change window and change detection statistics were used to determine the map that shows the transition of each land class and their statistical value respectively between the periods of 1986-1996, 1996-2006, 2006-2018 and1986-2018. The result showed that between 1986 and 2018 the amount of cultivated land increased from 30.7% to 74.3%; however, other land uses like grazing, shrub, forest and bare land decreased by 37.6%, 0.1%, 5.1% and 0.8% respectively. The overall five-class classification accuracies averaged were, 83.1%, 84.8%, 86.3%, 88.8% and Kappa of 0.80, 0.81, 0.82, 0.85 in the respective periods of 1986, 1996, 2006 and 2018. The low flow of Gilgel Abay and Andassa rivers (drained from Adama Mountain) showed a decreasing trend over the years due to change of recharge areas like forest and grazing lands in to cultivation areas that facilitates direct runoff instead of recharge. Further studies should be done for identifying major factors contributing for decreasing trend of river flow.