Analysing the drivers and implications of land use and cover (LULC) dynamics in land leased areas is essential for sustainable land use planning and environmental management interventions. The aim of this study was to examine the relationship between large-scale agricultural investment and the socioecological implications of land use change in western Ethiopia. We used black and white aerial photographs of 1967 and Landsat satellite images from 1977 to 2019, taken at 10-year study intervals, SPOT-6 imagery and qualitative data to understand better the complex interactions between large-scale agricultural investments and the socioecological effects of land use change. The dynamics of LULC changes for each period were classified using a hybrid approach combining the outputs of supervised classification, intensive on-screen digitising techniques and qualitative data from interviews and focus group discussions. The results indicated that small-scale cultivated and settlement land, commercial farmland, grassland and shrubland increased by 120%, 137%, 89% and 65%, respectively, between 1967 and 2019. In contrast, over those six decades, forest, woodland, wetland and water bodies declined by 49%, 76%, 10% and 16%, respectively. The results of the qualitative data also showed that land leasing for agricultural investments and subsistence agriculture leads to socio-environmental changes such as reduced forest cover, biodiversity loss and wetland degradation, which lead to loss of livelihood and marginalisation of local communities. As a result, a wide range of policy packages for socio-environmental issues are required to avoid the adverse effects of land leasing in the study area and other parts of Ethiopia.