Barind Tract, located in the North-West region of Bangladesh is a drought prone water stressed area. Barind Multipurpose Development Authority (BMDA) has made this desert like zone into a granary one through various activities including irrigation as major. Now, the agricultural pattern, cropping intensity, methods of cultivation, crop variety and yields – all show a positive change. The BMDA has significant impacts of reducing environmental impact as well as changing the living standard and socio-economic conditions of the rural people in Barind Tract. The present study aims to find out the environmental challenges faced by the farmers in the Barind Tract and the mitigation measures took by the BMDA as a large development partner for the sustainable development in the Barind Tract. As on environmental issue respondent in Puthia, Paba and Godagari zones identifies that low rainfall, extraction of ground water by DTWs (Deep Tubewells) and STWs (Shallow Tubewells), very thin flow of water in the rivers and also losses of groundwater from the aquifer to the river as base flow during dry season are the major causes of the scarcity of ground water in the Barind Tract. Droughts, high temperatures, less rainfalls, cyclones and thunderstorms and lightning also have been identified by respondents as the natural hazards affect their crop production and daily livelihood. To reduce the environmental challenges, no more new DTWs are being installed by BMDA (though private initiatives are still going on), emphasize on using more surface water from rivers and canals through low lift pumps, community based tree plantation programs in the project area, use renewable energy produced by solar panels and re-excavate canals and ponds for conservation of surface water. This study suggests that scientific assessment of groundwater resources with zoning for proper planning, increase augmentation of surface water as well as harvesting of rain water, crop zoning, increase cultivation of low water consuming crops and enhance groundwater recharge are now the demand of time for the study area.