The issue of climate variability and extreme impacts on households' livelihood vulnerability and well­ being are one of the sensitive concerns in Ethiopia. The aim of the study was to examine the impact of climate variability and extremes on households' livelihood vulnerbility in the northeast highlands of Ethiopia. To achieve this objective, both primary and secondary data sources were used. long-term historical daily and monthly rainfall and temperature data were obtained from different sources such as Cen'Irends Great Horn of Africa vi, CRU_TS 4.01 and the reanalysis of ERA5-Africa produced by institution of climate explorer and European Center for Medium-Range Weather Forecast (ECMWF). Meteorological recorded data were also documented from the Ethiopian National Meteorological Agency. Moreover, the study is based on household level data collected from 361 farm households. Different indices and tests were employed to analyze rainfall and temperature variability and trend; drought frequency, magnitude and severity level; and rural households livelihood vulnerability level. The indices used include Coefficient of variation, Precipitation Concentration Index, Standardized Precipitation Index, rainfall and temperature extremes indices and Climate vulnerability Index. The Mann-Kendall test and Sen 's slope estimator were used to analyze the trends and magnitude of change in rainfall and temperature. The Inverse Distance Weighted spatial analysis tool was used to illustrate the spatial variation and trends of rainfall and temperature and patterns of drought risk events. The rainfall and temperature extreme indices were processed using Ri-based software interface (RClimDex ver.1.0). The CV/ framework of Sullivan and Meigh 's model was used to assess the relative vulnerability of rural households' livelihood to climate variability and extremes. The distribution of kiremt. belg, annual and decadal rainfall demonstrated decreasing trends at a rate of 0.432mm/year, 0.335mm/year, 0.595mm/year and 6.537mm/decade, respectively. On the other hand, the averages of annual, maximum and minimum temperature were increased at the rate o.f 0.0034, 0.0028 and 0.0095°C!year, respectively. The decada/ minimum, maximum and average temperature has shown increasing trend at the rate of 0.098°C, 0.04111C and 0.069°C respectively. Extreme severe droughts were detected in the belg rainy months in March 2008 and April 1984. The year 1999 was the driest for the recorded periods during the belg season. On the other hand, the extremely severe droughts were observed during the kiremt rainy months of July 1987 and 2015, August 1984, and September 2009. Complex spatial variations of drought risk events were also observed in 1-, 4- and 8-months timesteps. Temporal and spatial inconsistent patterns of extreme trends and magnitudes results were showed among assessed stations. However, most of the temporal and spatial maximum and minimum temperature extreme indices indicated consistent significant increasing and decreasing trends; but with varied magnitude. The study revealed that livelihood zone of Belg (0.75) was at high level of livelihood vulnerability. ABB (0.57) and CHV (0.45) were at moderate level of livelihood vulnerability. Meher-Belg (0.22) was the least vulnerable livelihood zone perhaps due to high level of adaptive capacity such as infrastructure, asset accumulation and social networks. The highest level of exposure and sensitivity combined with low level of adaptive capacity increased rural households' livelihood vulnerability. Climate variability and extremes combined with feeble adaptation measures strongly affects rainfed agriculture more than any other activities. Hence, documentation and assessment of vulnerability related to climate variability and extremes based on the livelihood zones are essential for local-scale planning, early warning responses and risk management. Policymakers and stakeholders have to give top priority in the designing and introduction of appropriate livelihood zone-based specific adaptive strategies to reduce households' vulnerability to climate variability and extremes. Keywords: Rainfall, Temperature, Belg and Kiremt, Standardized Precipitation Index, Livelihood zones, Ethiopia