This study was aimed at analyzing time-series trends and variability analysis of observed rainfall and temperature records from 16 stations during the 1985–2015 period. Besides, it focused on the smallholders’ perceptions, including the analysis of their response strategies to both observed and perceived climate variability and its determinants. Both purposive and random sampling procedures were used. Mixed methods (quantitative and qualitative) of the research were used. The sample household survey method was used to collect primary data from smallholder farmers, while key informant interviews were used to gather qualitative data from the experts. A semi-structured questionnaire was used to collect quantitative data, whereas a discussion guide checklist was used to gather qualitative data. A total of 397 respondents and 24 key informants were used as sources of primary data. In addition, visits to the National Meteorology Agency of Ethiopia were made to collect recorded climate data. Descriptive statistics and econometric models were used to analyze quantitative data, whereas thematic categorization was used to analyze and report qualitative data. The results show that both the summer and annual rainfall have an increasing trend but are not statistically significant. With regards to variability, low to moderate levels of variability were recorded according to the seasons and annual rainfall. The result of the Mann-Kendall test shows that the mean minimum temperature was raised by 0.05 °C while the maximum temperature rose by 0.03 °C/30 years. The monthly maximum temperature also shows an increasing trend, with the lowest record during August (22.05 °C) and the highest in March (26.49 °C. Besides, smallholder farmers’ perceptions were in accordance with recorded station data. In response to both observed and perceived climate variability and its extremes, smallholder farmers in the study area were striving to adopt different adaptation strategies. Rain variability, frequency of extension contact, years of farming experience, access to institutions and infrastructure, wealth status, market access, and the number of active labor force within the household all hampered smallholder farmers' efforts to implement potential measures. In contrast, the high prices of chemicals and improved seed, access to credit services, land size, and limited access to accurate and timely early warning information all negatively and significantly influenced the adaptation decisions of smallholder farmers in the area. Therefore, the impacts of abnormal trends or shifts in observed rainfall and temperature patterns, along with socio-economic, technological, and behavioral factors, call for policymakers to set strategies that will enable smallholders to improve their livelihoods, ensure food security, and build resilience in the face of climatic extremes.