The use of traditional biomass fuels is associated with energy inefficiency, deforestation, increasing use of time for collection of fuel and deleterious health and environmental effects. Energy efficient stoves can alleviate some of these problems by reducing householders’ cash outlays for fuel, diminishing the time others must spend to collect fuel, reducing air pollution and relieving local pressure on wood resources. Parallel to the dissemination of the stove, there is a need for a detailed assessment to understand the relationship between stoves and their users. Therefore, this paper is aimed at examining the extent of fuel wood-induced deforestation, characterizing the improved stove in terms of environmental and socio-economic sustainability, and suggesting measures to enhance the sustainability of the stove. Accordingly, the study found that it has a significant impact in reducing deforestation and indoor emissions, increasing the safety of households, and reducing fuel wood expenditure. Hence efforts should be made to enhance its sustainability through following subsidy approach to make it affordable to low income households.