With consideration of proximate and intricate relationships among rural livelihood, farm land and forestry; this paper examined impact of land tenure reform on local peoples' forest dependency by taking Ethiopia as case study. The post 1975 major land tenure reform and associated activities such as land distribution and forest demarcation were found to be short of minimizing pressure on the forest as has been evidenced by percentage of new households established inside the forest and current level of dependency on the forest. With most of recently established households all making up the poor and very poor categories, together with overall of household composition which is dominated by dependent members coupled by current land tenure system that tie farmers with their land, future dependency on the already diminished forest seems to increase unabated. Reconsidering the existing land tenure system backed by policy for livelihood diversification, improvement in rural education and awareness on demographic issues can minimize future dependency on the forest.