This study was conducted with the objective of assessing the impacts of corruption on socio- economic development in Shambu town, Oromia Regional State, Ethiopia. To this end, Cross sectional descriptive survey research design, and mixed approach were used. And, questionnaire was distributed among 142 respondents accidentally, and an interview was conducted with 18 key informants to collect data. Besides, secondary data were used. The data collected through questionnaire were analyzed using SPSS software (Statistical Package for Social Science) version 20 while the data collected through interview were analyzed qualitatively. The study reveals that corruption is highly affecting the development of socio-economic of the study area. In this respect, some of its specific impacts are include negatively affect the social relation of the society, lack of provision for infrastructure among society, affecting equality rights of using resources, making the gap between the rich and the poor wider, affects standard of living, unnecessary conflicts among the society, decreasing the town investment, highly reducing taxes and revenues, negatively affecting the total economic growth of the municipality and etc. are some of the problems of corruption and its impacts. Thus, corruption is highly prevailing in Shambu town that affects social development and economic development in the study area. It also a serious problem that Shambu Town are suffering from and a setback to the development efforts of a town. Thus, the study recommends that commitment is needed from the concerned bodies like the government, the anti- corruption commission, the woreda court and the civic association to provide strong policy of controlling mechanism especially on the office holders, to set systems and structures that can reduce corruption and ensure efficient delivery of services to the community, to impose strong responsibility on the town administration offices and should be to make a Learnable punishments and establish good governance and democratic leaders in the town and strongly work to minimize the corruption on socio-economic development.