Agriculture which supports the livelihoods of the majority is challenged by many stressors including climate change impacts. Impacts such as floods and droughts have left farmers with no reliable option rather than farm management and off-farm activities such as irrigation, use of improved seed varieties, crop and livelihood diversification. Nevertheless, contribution of such practices to improving livelihood among smallholder farmers is generally documented and concluded. This study was therefore carried out to determine effectiveness of local agricultural innovation system in enhancing livelihood of smallholder farmers in semi-arid Tanzania. The study was conducted in Sanjaranda and Gurungu villages, Manyoni District. Literature review and Participatory Rural Appraisal (PRA) methods including focus group discussions and household interviews; key informant interviews, and transect walks were employed to collect data. Results from the study indicate that, the surveyed communities were knowledgeable of climate change of their localities in the past 20 years. Changes in the climate included shifting of rainfall seasons, fewer and erraticrains and an increase in temperature. Meteorological data also supported a decreasing trend in rainfall and an increase in annual average temperature by 0.7ºC in the past 30 years. Responding to these changes, farmers developed a number of farming practices that included use of improved seed varieties, improved agronomic practices, in-situ rainwater harvesting and application of farm yard manure. These practices were also supported by public activities, civil society organisations and the private sector contributions to increase trends in crop yields in one way or another. This study argue that, strengthening local agricultural innovation system could enhance community livelihoods under changing environment.