This study examines the governance of local land use rights and farm investments in the context of inclusive and responsible manner in Ethiopia. The question addressed in this research is whether balanced approaches can be pursued in the course of encouraging farmland deals that recognize and protect local land use rights, and at the same time acknowledge the role and benefit of the local people in the process. The study employs a socio-legal research approach, and it is mainly doctrinal that focuses on laws, international instruments, reports, and academic literature. The empirical part of the research uses case study at two farm investment sites: Ethio Agri-CEFT PLC’s Ayehu Farm and Ayo Zingini Farm PLC. The researcher has employed both primary and secondary sources. The primary sources for the doctrinal aspects of the research are laws, while the respondents of the primary data for case studies include local land users, experts, and officials of the government institutions and the farm investment companies. Primary data for case studies are collected through key informant interviews, focus group discussion and observations. Secondary sources have been used from published and/or unpublished documents, reports and various documents. The result of the study shows that farmland investment projects in selected case study sites have failed to protect local land use rights, and did not recognize local involvement thereby failing to achieve the intended promises of investment benefits. The case study in this research gives insight to other large-scale farms under similar contexts and this substantiates the findings of various academic literature discussed in the study relating to the failure of large-scale farm investments to accommodate local land use rights. The researcher argues that farmland investments in Ethiopia can be effective means for the achievement of the intended development promises only if such investments are based on inclusive and responsible governance.