This paper on livelihood diversification is based on an ongoing study under VicRes programme being undertaken in the Lake Victoria Basin, in Tanzania, Kenya and Uganda. We examine how changing socio-economic and environmental conditions contribute to livelihood diversification, land-use changes, poverty reduction strategies and environmental conservation in the Lake Victoria Basin. The study was undertaken using both qualitative and quantitative methods. The qualitative methods included focused group discussions, key informant interviews and direct observations. Quantitative data were collected using a structured household questionnaire. Qualitative were analysed with the villagers by triangulation, while quantitative data were analysed using standard statistical methods. Findings from the study indicate that while agricultural production is prominent in the highland areas, the major activity in the lowland villages is fishing. Factors such as population increase, drought, and changes in macro and micro socio-economic conditions have resulted into livelihood diversification and land use changes in the Lake Victoria basin. Some of the livelihood activities influence the socioeconomic dynamics, natural resource management, and the environment, leading to increased land degradation, low agricultural productivity, water pollution, food insecurity and poverty. The study also established decreasing trends in land availability over time attributed mainly to increasing population pressure and livelihood diversification.