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Climate change is expected to increase weather variability and incidences of extreme events, which will have an impact on livelihoods and wellbeing. This study was intended to assess the role of livestock diversification in minimizing climate change adverse impacts on livelihood assets in Dangila district, Ethiopia. A random sampling technique was used, and 107 sample households were selected. Primary data were collected through field visit and interview, whereas secondary data were collected from the district agricultural office and meteorological stations. To analyze the data, descriptive statistics, correlation and multiple linear regressions were used for testing the hypotheses. Accordingly, the results revealed that weather shocks affected livelihood assets negatively and significantly (β = - .157, p < 0.05) than other shocks. There has been a significant positive interaction effect (β = .197, p < 0.05) between adaptive capacity and weather shock which implies that a household's adaptive capacity (through livestock diversification) counteracts the adverse effects of weather shocks on livelihood assets. Cattle population size has decreased by 19.8% from 2008 to 2017, which infers that reductions in rainfall amount and variation drive the downward trend in cattle number. To conclude, the efforts, which were achieved in terms of sustainable adaptation practices that enhance the resilience of household's livelihood assets, were not adequate. Therefore, to further enhance households' adaptive capacity, improvement in livestock diversification through the provision of a package of livestock species and access to credit for youths were recommended.