Lumpy skin disease (LSD) is a serious pox disease of cattle caused by LSD virus of the genus Capripoxvirus, subfamily Chordopoxvirinae and family Poxviridae. It is economically an important disease due to its effect on productivity, fertility, animal survival, hide quality, and trade. LSD is an endemic disease in Ethiopia having serious consequences on both national and household incomes. This PhD study has been undertaken with the main aim to generate information on LSD epidemiology, vaccination effect and financial consequences to support the formulation of a disease control strategy. An LSD outbreak occurred at least once in all of the regional states and city administrations in Ethiopia between 2000 and 2015. The average incidence of LSD outbreaks at district level was 5.58 per 16 years (0.35 per year). The trend of LSD outbreaks increased over the study period. Outbreaks were frequent at the end of the long rainy season and more numerous in areas with relatively high rain fall. The true animal level and herd level sero-prevalences were estimated as 26.5% (95% CI: 24.7-28.3) and 51.0% (95% CI: 46.8-55.1), respectively. Adult age (OR=2.44, (95% CI: 1.67-3.55)), contact with other animals (OR=0.41 (95% CI: 0.23-0.74)), and presence of water bodies (OR=1.61 (95% CI: 1.03-2.52)) were identified as the most important risk factors at individual animal level in relation to LSD sero-positivity. The transmission rate between animals in the crop-livestock production system was 0.072 (95% CI: 0.068-0.076) per day, whereas the transmission rate among animals in intensive production system was 0.076 (95% CI: 0.068-0.085) per day. The reproduction ratio (R) of LSD between animals in the crop-livestock production system was 1.07 and in the intensive production system it was 1.09. Kenyan sheep pox virus strain vaccine (KS1 O-180) significantly reduces the severity of the disease. The vaccine efficacy for susceptibility was estimated to be 0.46 (i.e. a susceptibility effect of 0.54) while the infectivity effect of the vaccine was 1.83. The LSD field outbreak economic impact assessment revealed a total economic loss of USD 1176 per affected herd (USD 489 in the subsistence and USD 2735 in the commercial farm type). The financial analysis showed a positive net profit of USD 136 per herd (USD 56 in the subsistence and USD 283 in the commercial farm type) to LSD vaccine investment. Generally, this PhD research provides insight into the epidemiology, economic impact and control opportunities of LSD in Ethiopia that can support policy makers to formulate control strategy for the disease, which is currently lacking in the country.