Information on Land Use and Land Cover (LULC) changes and the driving forces behind such modifications underpin a proper understanding of the dynamics of LULC changes. This study aimed to analyses the dynamics of LULC change and its driving factors in Enqulal watershed for the year 1990–2020 which the area covered in 569.32 ha. Four satellite images downloaded from USGS were used to analyze and assess the geospatial and temporal changes in LULC. Addition, in-depth household interviews; key informant interview, focus group discussions (FGD) and field observations were used to address the drivers of LULC changes. The result showed during the last 30-year period between 1990 and 2020, the proportion of area covered by forest and grazing land was continually decreasing as it were 82.16ha (14.43%) and 185.65ha (32.61%) in 1990 and 72.36ha (12.1%) and 65.52ha (11.52%) in 2020, respectively. In contrast farm and settlement land were continuously increasing as it was 298.18ha (52.38%) and 3.33ha (0.58%) in 1990 to 334.26ha (58.26%) and 97.19ha (17.07%) in 2020 respectively. Farmland expansion, cutting trees for various purposes (such as firewood, charcoal and construction material), overgrazing and the expansion of settlements, were identified as the major proximate causes of these changes. Moreover, the major underlying drivers of LULC changes include population growth, changes in policy and institutions, poverty and lack of awareness on the importance of natural resource conservation for sustainable livelihoods. From this study, it can be concluded that Enqulal watershed has experienced a change in LULCC the past 30 years and were affected both positively and negatively for livelihoods. Hence, a wide range of policy packages were required for sustainable land management practices which take in to account synergies between the various land uses in the study area. The national and local governments should enforce sustainable land management approaches through integrating land use planning and management into all development program and projects for land.