Land degradation, in the form of soil erosion and nutrient depletion, threatens food security and the sustainability of agricultural production in many developing countries. As part of intervention activities a number of soil and water conservation practices have been promoted to smallholder farmers living in highly degraded and drought prone areas of the country. This study was conducted to examine the impact of SWC intervention on the livelihood of smallholder farm households in terms household income. To meet this objective primary data was collected in 2019 from 146 SWC program participants and 130 non-participants that were randomly selected from 3 intervention area and 3 counterfactual peasant associations in Chencha district of SNNP respectively. Descriptive and inferential statistics and propensity score matching (PSM) models were used to address the stated objectives. Results of the descriptive statistics showed that before matching there was statistically significant difference between program participants and their counterfactual households in terms of farm size and participation in petty trade from continuous independent variables and from categorical variables sex of household, education of household head, biological and physical conservation method, intercropping as well as bench terrace were significant in favor of program participants. Results of the PSM model revealed that SWC intervention result in significant difference between program participant and nonparticipant households in terms of household income. Keywords: Chencha, Income, land degradation, PSM model, Soil and water conservation DOI: 10.7176/CER/12-2-01 Publication date: February 29 th 2020