LULC change is conversion of one cover type to another and/or modification a change within one land use category and it is an undeniable global trend. This study was conducted in Legedadi reservoir watershed in North Western Shoa Zone Aleltu and Bereh district where there is high soil erosion which aggravated by LULC change. The objectives of this study were to examine the LULC dynamics in the Lagedadi watershed in the last three decades, to identify the main drivers of LULC change in the watershed, to map the soil erosion risk and determine sedimentation to the reservoir and prioritize land management intervention in the watershed. Three time series satellite imageries (Landsat TM 1985, TM 1997, and ETM+ 2013) have been utilized for LULC change analysis. The landcover map of the year 1997 and 2013 were used to produce the soil erosion risk map. Rainfall data, soil data, DEM data and satellite images were used as inputs to generate the RUSLE factor values. The research put together the Revised Universal Soil Loss Equation (RUSLE) with a Geographic Information System (GIS) to quantify the potential soil erosion risk. Raster calculator was used to interactively calculate potential soil loss and prepare soil erosion risk map. The results indicate a continuous and active LULC change at various spatial and temporal scales. In the last 28 years, settlement area and cultivated land were dramatically increased by 14.34 % and 18.3%, and on the other hand grazing land and bare land were reduced continuously by 25.74% and 18.47 % from 1985 to 2103 respectively. The potential annual soil loss of the watershed ranges from 0-257.195 ton/ha/year in 1997 and 0.0 to 330.013ton/ha/year in 2013. The mean annual soil losses are 54.19 t/ha/yr in 1997 and 66.21 t/ha/yr in 2013. The average annual soil loss from each sub-watersheds ranges from 34.57 to 89.19 t/ha/yr. Prioritizing sub-watersheds which are, first stage (B and A) and second stage (C and D) need urgent solutions. Therefore, appropriate land use planning, physical conservation mechanisms (Terracing and Contour ploughing) and biological conservation (Afforestation and area closure) should be implemented. Key Words: Legedadi Dam, Watershed, LULC Change, Soil erosion risk, RUSLE, GIS