The low livestock productivity and persistent food insecurity in Ethiopia are important development gaps that need context-specific technological interventions. One of the major causes of low livestock productivity is shortage of feed for year-round livestock feeding. Adoption of improved fodder technologies by smallholder farmers, especially the production of perennial forages with supplemental irrigation, is expected to improve feed resource availability and household income. However, the main drivers to the adoption of fodder technologies and the subsequent impact on income and livelihood of farmers are not well investigated in the smallholder system. Therefore, this study explored the driving factors that influence the adoption of irrigated fodder and estimated the resulting impact on household income. For the analysis, household-level data was obtained from 351 farm households, in the project intervention areas through purposive sampling with stratification. Both primary and secondary data were collected through interviews and scoping review. A probit model was employed to analyze the driving factors and the endogenous switching regression (ESR) model was used to estimate impact. Among the total sample, 51.57% were found to be adopters. The findings suggested that fodder adoption probability increases with irrigated land size, participation in dairy cooperatives, forage seed access, dairy farm experience, education, extension service, number of milking cows, training, and dairy cow breed type, while adoption was affected negatively by age, water use association, and distance to FTC. The ESR model result showed that the adopters’ dairy income and total farm income had increased by 3,975.08 ETB , and 10,427.20 ETB respectively. Whereas non-adopters dairy income and household farm income are decreased by 3,044.41 ETB, and 35,994.58 ETB because of not adopting respectively. This study highlights the importance of strengthening dairy-cooperative and local forage seed production capabilities, as well as market linkage. A comprehensive and integrated approach is needed for better and widespread adoption. Besides, continuous capacity building and follow-up extension support are needed for the adopters to continue adopting and bring non-adopters to adopt the new practices. 1 Keywords: Livestock, irrigated fodder, adoption, impact, farmers, probit, ESR, Ethiopia. 1 ETB is Ethiopian birr currency (purchasing power parity) which is equivalent with 1USD = 40.25 ETB (March month, 2021).