The study examines the changes in household demographics and access to livelihood assets, and their effects on livelihood sustainability in one of the rain-endowed districts in South West Ethiopia. A binary logistic regression model is used to analyze the relative effect of the predictor variables on sustainable livelihoods based on data obtained from 390 randomly selected households. The results show that the likelihood of sustaining a livelihood is low for households headed by the young and the old, and by females. Low literacy levels, decreased livestock holding, lack of access to credit, absence of saving, and low social capital are also found to significantly reduce livelihood sustainability. The effort to sustain livelihoods and reduce vulnerability is, thus, based on the life cycle of households and the corresponding change in their livelihood assets. This implies the importance of life cycle stages of households, differential access to livelihood assets, and their repercussion on environment and livelihoods, in order to design interventions that enhance livelihood sustainability.