Current research provides less understanding of how climate change affects the livelihood process at a household level. This study explores household's perceptions of climate change and its implications on livelihood formation process using empirical data from Uganda. Climatic data, household surveys, and key-informant interviews from Wakiso and Gomba districts served as data sources for the study analysis. Majority of the respondents observed climate changes in the last 10 to 20 years and perceived them to have affected their capital assets in the process of forming livelihoods. As a result, households' livelihoods have diversified, and are pursuing livelihood strategies for sustenance. The study underlines the need to access credit conditioned to climate change resilience, access to improved varieties of crops, availing extension services, and targeted resources allocations. Incorporating climate change into the planning process at a local level and associated local institutions in order to improve livelihood formation processes of households is recommended.