Understanding the drivers of the land use land cover change is essential for development of appropriate land use system. The study conducted in north-western Ethiopia Banja district aimed to identify the direct and indirect drivers behind the LULC changes that had occurred. The study uses multistage sampling technique to draw 145 randomly selected households. Both primary and secondary data sources were used for this purpose. Descriptive statics and DPSIR ranking index model used to analyse data from household surveys to rank drivers of land use change from agricultural land to Acacia plantations or forestland. Decline of soil infertility for crop production, use of tree for income generation and increase of demand for forest products were identified as direct drivers of LULC, whereas high cost of agricultural input, soil erosion and land degradation and lack of technology to improve agricultural practice, were indirect drivers of LULC from agriculture to Acacia plantation. The result of binary logistics regression shows that total land holding, annual income, and the distance from residence to woodlot are statistically significant variables that influence positively farmers’ decisions to change their farmland to Acacia plantations, whereas households’ educational status negatively influences farmers’ decisions to change their farmland to plantation land. Due to land use change from agricultural to plantation forest currently farmers, face lack of cropland, decreased crop production and shortage of animal fodder. On the contrary, they perceived that improvement of soil fertility, reduced land for grazing and biodiversity. Then it is to recommend that the concerned body should promote appropriate land use policy centred on major drivers of land use system from agricultural to forestland