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Environmental degradation has been identified as a major problem in Ethiopia today. Inappropriate use of land management practices has decreased the country's arable and forestlands, drastically deteriorated soil and water quality and severely affected the biodiversity within the environment. Desertification, deforestation, and urbanization are believed to be the primary causes of the loss in biodiversity and global climate change. It is therefore necessary to assess, take inventory, and determine the effect of land use land cover (LULC) change on the environment in this region. Multi date satellite imagery was obtained to quantify the changes that have occurred. Integration of the results of the imagery analysis and GIS was used to define policies that encourage intelligent use of natural resources. The study site was the northwest part of Ethiopia surrounding the Blue Nile Region of Lake Tana. The primary objective of this project was to use remotely sensed data (i) to quantify the LULC change that has occurred over a 12-year period; (ii) identify the nature and spatial distribution of the change; and (iii) define a management approach that will prevent further environmental degradation. Landsat TM-5 and 7 imageries from 1987 and 1999 respectively, were acquired and each scene was georeferenced and radiometrically corrected. The images were processed using ERDAS Imagine 8.4 (ERDAS Inc., Atlanta, GA) Image Processing software. Comparing results of the unsupervised classification for 1987 and 1999 we observed a major loss of riparian forest along the bank of the Blue Nile River. It was also evident that a considerable amount of land was deforested which may have contribute to the continuing soil loss from the highlands of Ethiopia.