Land use land cover (LULC) change is one of the essential issues in global environmental change and sustainable development. With an area of 1,130,000 km2, and as one of the most populous countries in Africa, Ethiopia is experiencing huge LULC dynamics from natural vegetation to farming practices and human settlement. A change in Land-use can greatly alter the rate and extent of soil erosion and sediment export. This study evaluated land use land covers change on soil loss and sediment yield from 1986-2020 in Gumara watershed, northwestern Ethiopia. The impact of LULC change on soil loss and sediment yield were evaluated through application of the model InVEST (integrated valuation of ecosystem services and trade-off). Input maps required for InVEST SDR model such as rainfall erosivity and soil erodibility factors, DEM and land use maps were prepared. Landsat 5, Landsat 7ETM+, and Landsat OL_TIRSI at a spatial resolution of 30m were used for LULC change analysis. Land use land cover change maps were processed by ERDAS imagine 2015 and ARC GIS 10.3. A successful classification of LULC was achieved with acceptable overall accuracy and Kappa coefficient of more than 80 %. The results revealed that agricultural land are the most dominant LULC type in the watershed and expanded from 70.29 % in 1986 to 89.32 % in 2020. Similarly, built-up areas also increased from 0.27 % in 1986 to 0.45% 2020 periods. On the other hand, a significant decrease was observed in the study watershed under forest 11.77 %, shrub land 9.1 %, and grazing land 8.57 % in 1986, to 3.22 %, 4.34 % and 2.66 % in 2020 periods respectively. From the overall results of this study, it is possible to conclude that LULC change from 1986 to 2020 had increased the average annual soil loss 19.9 t ha −1 year −1 in 1986 to 64.1 t ha −1 year −1 in 2020 and also increased the annual sediment yield from 6.4 t ha −1 year −1 in 1986 to 22.2 t ha −1 year −1 in 2020 within the watershed. These suggest an urgent need to control the LULC changes to reduce the expected increase of soil erosion and sediment yield.