Changes in land use and land cover (LULC) are becoming recognized as critical to sustainability research, particularly in the context of changing landscapes. Soil erosion is one of the most important environmental challenges today, particularly in developing countries like Ethiopia. The objective of this study was evaluating the dynamics of soil loss, quantifying sediment yield, and detecting soil erosion hotspot fields in the Boyo watershed. To quantify the soil erosion risks, the Revised Universal Soil Loss Equation (RUSLE) model was used combined with remote sensing (RS) and geographic information system (GIS) technology, with land use/land cover, rainfall, soil, and management approaches as input variables. The sediment yield was estimated using the sediment delivery ratio (SDR) method. In contrast to a loss in forest land (1.7 %), water bodies (3.0 %), wetlands (1.5 %), and grassland (1.7 %), the analysis of LULC change (1991–2020) showed a yearly increase in the area of cultivated land (1.4 %), built-up land (0.8 %), and bare land (3.5 %). In 1991, 2000, and 2020, respectively, the watershed's mean annual soil loss increases by 15.5, 35.9, and 38.3 t/ha/y. Approximately 36 cm of the watershed's economically productive topsoil was lost throughout the study's twenty-nine-year period (1991–2020). According to the degree of erosion, 16 % of the watershed was deemed seriously damaged, while 70 % was deemed slightly degraded. Additionally, it is estimated for the year 2020 that 74,147.25 t/y of sediment (8.52 % of the total annual soil loss of 870,763.12 t) reach the Boyo watershed outlet. SW4 and SW5 were the two sub-watersheds with the highest erosion rates, requiring immediate conservation intervention to restore the ecology of the Boyo watershed.