Ethiopia, despite contributing minimally to global greenhouse gas emissions, is consistently cited as one of the most vulnerable countries, not only in Sub-Saharan Africa regions but also globally, to climate variability and change. The country's farming households are most vulnerable because of their climate-sensitive livelihoods and limited resources to finance adaptation measures. This study aimed to assess the livelihood vulnerability of communities reliant on a mixed crop-livestock agricultural system and natural resources in the Central Rift Valley sub-basin of Ethiopia to climate variability and change. Structured interviews were used to collect quantitative data from 339 randomly selected households. Livelihood Vulnerability Index was developed to assess the degree of livelihood vulnerability between the two districts. The survey results were supported and substantiated by focus group discussions. The findings show that farm households living in the sub-basin experience different levels of vulnerability to climate variability and change because of their varying adaptive capacities. Considering the aggregate Livelihood Vulnerability Index, Arsi Negele district is considered to be more vulnerable to climate variability and change. The livelihood Vulnerability Index-Intergovernmental Panel on Climate Change results also show that Arsi Negele is more vulnerable since its exposure scores exceed its adaptive capacity. Several factors contribute to the weak adaptive capacity of farmers in Arsi Negele. These factors include lesser adoption of agricultural technology, a low level of knowledge and education, insufficient social networks, less diversification of livelihood strategies, and higher socio-demographic vulnerability. In contrast, Adami Tullu Jido Kombolcha district has a higher sensitivity score due to its limited access to potable water, housing, and land ownership. Strategies that minimize households' degree of sensitivity and enhance their adaptive capacity should be promoted. Such strategies should include the adoption of improved agricultural technologies, strengthening awareness and technical capacity, promoting better soil and water management, accessing credit options, and building community networks. Diversifying household income and establishing alternative livelihoods should also be encouraged.