Land use and land cover (LULC) change have intense implications on soil resources, that requires research attention and global collaboration to take urgent actions. The present study attempted to analyze the impact of LULC change on soil erosion and sedimentation in Muger Sub-basin, southwestern parts of Ethiopia. Landsat TM 1986, Landsat ETM+ 2003, and Landsat OLI/TIRS 2020 are used for LULC analysis. We used rainfall erosivity, soil erodibility, slope length and steepness, cover management, and conservation practices to calculate soil erosion and sedimentation between 1986 and 2020. In this study, the integration of revised universal soil loss equation (RUSLE) model and geographic information system (GIS) are used to analyze the impact of LULC change on soil erosion and sedimentation. The average soil loss rate is about 53.2 ton/ha/year in 1986 and increased to 63.6, and 64 ton/ha/year in 2003, 2020, respectively. Result revealed that about 2,707.7 ha (33%), 3,124.5 ha (38.1%) and 3,197.4 ha (38.9%) were exposed to severe erosion in 1986, 2003 and 2020, respectively. The mean sediment yields of the study area is estimated to 7.8 ton/ha/year in 1986, and later increased to 10, and 10.2 ton/ha/year in 2003, and 2020, respectively. Results revealed that the steep slope areas with crop land experience considerable soil loss, with mean soil loss increasing over all study period. Thus, urgent policy on the wise use of natural resources is essential not optional to reduce the current soil loss and sedimentation in Muger Sub-basin.