Smallholder farmers require viable adaptation strategies for climate change. Adaptation project might be mal-practiced unless it considers the local diversity. This paper argued that the challenge of agriculture in developing countries in general and Ethiopia, in particular, is much diversified and thus interventions require a systematic shift to specific agro-ecosystems. In light of this, we used agro-ecosystem analysis to design locally appropriate adaptation strategies specific to Rib watershed in Ethiopia. The agro-ecosystem uses three inputs of agro-climatic zoning, soil type and terrain analysis, and farming systems. We used primary data collected from 383 randomly selected farm-households. The survey data was supplemented by key-informant interviews, focus group discussions and secondary data. We characterized and mapped the study area in two distinct groups of agro-ecosystems: Fogera plain and Libo-Farta highlands. The finding portrayed that across these agro-ecosystems, there was considerable difference in the: potentials, constraints, crop type, income distribution, and soil type. We found blanket application of the same strategies irrespective of these heterogeneities. The income distribution shows that the poorest 20 percent of the population share about 5 percent of the income. Relatively the plain has less income inequality with 38.3 as compared to the highlands Gini coefficient of 42.8. Looking only at the average distribution of income does not reveal the inequality. It is important to disaggregate into the specific agroecosystems. The study identified that drainage projects, fruit trees, and fishing are among the prioritized adaptation strategies for the plain while conservation structures, irrigation, agroforestry are tailored to the highland areas. It is important to consider diversities before intervention.