Land use land cover change (LCC) is influenced by human action and natural processes. The human influence is for the purpose of fulfilling the basic needs. The main influencing factor is the increase of population. The increase in population increased the demand for utilizing natural resources, which in turn resulted in land degradation. Biodiversity losses, environmental pollution and climatic changes are the negative consequences of LCC. This study aimed at detecting and analyzing LCC and its effect on soil erosion. The study was conducted in the highlands of south Wollo, Yewoll watershed, Blue Nile basin. Three Landsat images (1986, 2000 and 2016) were used to analyze the LCC. Supervised classification using maximum likelihood algorism was used to analyze the LCC. In addition, socio-economic data was collected to support satellite image analysis. The view of residents was used to develop historical trend of land cover and to understand the knowledge and the perception of the residents in the watershed. Four land cover types (LCTs) were defined. These are cropland, forest, and grassland and shrub land. Multi criteria decision analysis (MCDA) using Analytic Hierarchy Process (AHP) was used to prioritize the most influencing factor for soil erosion. Five major factors, namely; land use, slope, soil types, topographic wetness index (TWI) and altitude were considered to analyze the erosion hotspot area. The result showed that the cropland and grassland increased from 41.6% and 15.4% in 1986 to 58.8% and 28.3% in 2016, respectively. However, shrub-land and forest decline from 32.3% and 10.6% in 1986 to 5.6% and 7.3% in 2016, respectively. The driver of change is the increase in human and livestock population. The socioeconomic survey analysis also indicating that forest is converted to cropland and shrub-lands are used for grazing. The AHP analysis showed that LCT is the most contributors for erosion. It is observed that free grazing in the area is the common practice which is the main contributor for erosion. Hence, 50% of the gully erosion is influenced by LCT. As the result of MCDA model shows soil is the second most important parameters in identifying erosion hotspot area in Yewoll watershed. The resultant erosion risk map shows that 1.12% of the area lies under low risk zone, whereas 19.02%, 72.67% and 7.2% of the total area fall in medium, high and very high risk categories respectively. These results were verified by field data collected and the judgment of the experts.