Climate change is a global challenge to both sustainable livelihoods and economic development. In Tanzania as in most African countries, farming depends almost entirely on rainfall, a situation that makes agriculture and thus rural livelihoods especially in semiarid environments particularly vulnerable to climate change. This study analyses the impacts of climate change and variability on rural livelihoods with particular focus on agricultural production, food security and adaptive capacities in semiarid areas of Tanzania. The methods used in this study included focus group discussions, key informant interviews, household surveys and field observations. Results from the study indicate that communities understood climate change in terms of variability in rainfall patterns and amount, temperature patterns, wind, water availability, increased incidences of drought and decreased agricultural productivity. Communities in the study area acknowledged that while rainfall amounts have decreased over the last thirty years, temperatures have increased; an experience is also supported by meteorological data. Such changes were claimed to have reduced agricultural productivity particularly due to prolonged drought, inadequate and uneven distribution of rainfall as well as unpredictable onset and ending of rains. Stressors such as crop diseases and pests, low soil fertility and inadequate extension services were also reported to contribute to the decline in agricultural productivity and re-occurrence of food insecurity. In response, communities have developed multiple adaptation strategies, including growing of drought tolerant and early maturing crop varieties, increasing wetlands cultivation, water harvesting for small-scale irrigation and livestock keeping. However, households with limited livelihood assets are more vulnerable to the impacts of climate change and food insecurity. The study argues that diversification of adaptive strategies, such as water harvesting for small-scale irrigation, integration of livestock and crop production are crucial to ensuring sustainable livelihood in a changing climate.