Forest cover change analysis between 1973 and 2003 was conducted in Banja Woreda, Awi zone, Amhara region using remote sensing and geographic information system (GIS) supported with field verifications. Information was extracted from various Satellite images and different digital maps. The objectives of this study were to detect the extent and rate of forest cover change over the last 30 years. Three dates of Landsat image data of the 1973, 1986 and 2003 were used to produce land cover map in general and forest cover map in particular. NDVI image differencing and post-classification comparison change detection methods were employed. In addition to this, household levels of socioeconomic data were used in explaining the causes of forest cover changes in the study area. The results show that during the last 30 years, forest cover declined from 6044 ha in 1973 to 2855.9 ha in 1986 and 2446.9 ha in the year 2003. The annual rate of forest cover change between 1973 and 2003 was 120 ha/year. The socio-economic factors like population growth, the demand for the expansion of agricultural land, fuel wood and construction materials were major driving forces for observed forest cover changes.