In spite of getting diverse interests of commissioning power plant at Kaptai in Chittagong Hill Tracts, its ecological consequences were many-fold. Firstly, the population pressure increased in the vicinity of the Kaptai lake for swallowing most of the best valley-bottom land and consequently there was an acute shortage of suitable cultivable land. Secondly, competition for jhum land increased so greatly that the fallow cycle has been reduced and the natural system of soil conservation became fragile. Thirdly, destruction of the forest exposed the ground surface to the rainwater and the traditional slash and burn techniques resulted in incessant soil loss, depletion of plant nutrient, competition from weeds and yield decline. Such widespread land degradation manifests itself in a declining rural income, fuel wood shortage and silting up of the Kaptai reservoir. The changes have also greatly increased the fire hazard, environmental pollution, wild life depletion, scarcity of safe drinking water. Therefore, the long-term sustainability of hill land agriculture in the watershed area of Kaptai lake is obviously threatened in terms of productivity and ecology. Watershed area: Once the lake area was the part of undulating valleys, mostly suitable for crop cultivation. The adjacent hill soils are mainly deep, well-drained predominantly loams that have been weathered from tertiary sandstone and shale. About ninety percent of the hill slope is mainly very steep (>55% slope). Soil erosion is a hazard in the exposed areas of the hill slope. Except the Kassalong and Rankhiang reserved forests, the almost entire watershed area of the lake has been deforested by jhumias. As a result, the hill lands are now mostly covered with scrubs which include scattered trees of different species, bamboos, grasses and shrubs. The vegetative cover no-where in the hilly area is uniform and thick. For this reason, soil cover has been exposed and rainwater easily causes soil erosion during monsoon. Pre-reservoir land use: The outstanding spatial feature of land use in the pre-reservoir period was the aerial predominance of scrubland and the shifting cultivation. These two categories occupied almost ninety percent of the total land area outside the reserved forests. Shifting cultivation represented a reasonable adjustment to the rainfall regime during pre-reservoir time. The sungrass and scattered shrubs and trees that re-established themselves after abandonment by jhumias had little or no direct economic value, but they provided a dense vegetative cover that served to control soil erosion. During the years just prior to the Kaptai development very little flat alluvial land was available for the resettlement of jhumias. Moreover, the extension, fertilizer and other services and facilities necessary for the successful establishment of permanent cultivation on the hill slopes simply did not exist at that time. So, the shifting cultivation had become a problem only in places where the natural population growth had increased the competition for land and shortened the period of land rotation. Aqua-terrestrial ecosystem: The important issues that are directly related to the characteristics of aqua-terrestrial area of Kaptai lake for changing agro-ecosystems and consequently for decision making can be distinguished as on-site and off-site. Apprehensive increasing population pressure coupled with shortage of suitable upland increases in the intensities of jhum cultivation resulting in over exploitation of natural resources due to lack of proper knowledge and inadequate conservation technologies and may be denoted as on-site effects, the ill effects of hill land agriculture. Increase in populations has placed great strain on the traditional jhum cultivation system in the sloping land of the area. Deforestation continues over time by clearing land for cultivation which also results in changing wildlife habitats into livestock areas. Deforestation rates are still higher than reforestation. Factors responsible for accelerating soil erosion include improper management of sloping land, traditional jhum cultivation with short fallow period and deforestation in the area. The soil erosion causes land degradation and ultimately causes the silting up of the lake, which can be termed as serious off-site environmental effects. Sedimentation from erosion fills reservoir, significantly reducing its usefulness for navigation as well as flooding, hydroelectric power generation, fisheries and recreation facilities. Land degradation as on-site effect reduces crop productivity of soil causing low output that ultimately affect overall socio-economic environment of the area. Soil erosion and fertility loss: The major factors which have contributed to the intensification of soil erosion are very extensive misuse and mismanagement of terrestrial land resource of Kaptai lake. Farmers frequently clean bush, follow slash and burning process for practicing jhum cultivation. The agronomic practices in jhum are dibbling, weeding, and followed gradual harvest. These practices result in severe soil loss and formation of gullies. The rate of soil erosion in the hilly areas of Bangladesh has been estimated 520 t/ha per year. The depth of top soil loss may be 0.2 to 5 cm and sediments deposited in drains and ditches are 9-130 cm depending on slope, soil type and cultivation practices. In contrast, at least 500 years are required for the formation of 2.5 cm of top soil from the tertiary sedimentary rock in the hills. It is now fact that water erosion removes the most fertile part of the soil containing available plant nutrients and organic matter with the result that the physical condition of the soil deteriorates. In general, soil erosion adversely affects the functioning of natural ecosystem, the production base and quality of the life of the people in the areas. Sedimentation in the lake: Since the commissioning of the hydroelectric dam, the original bed of the reservoir is being silted up by the process of soil erosion from the adjoining hills. It was seen that water areas in the lake has shrunk considerably. The siltation from adjoining hills is reducing the reservoir capacity. During recent years the effect of siltation in the lake have so prominent that navigability has become difficult because of the low water level that remains so till the end of the dry season. The low water level during the peak of dry season is also creating adverse effect on the generation of hydroelectricity. The fish wealth in the lake is also being affected due to the reduction of water area and shallow depth of water. Obvious emergence of more and more fringe land out of the water during the dry season every year has become a regular phenomenon. The condition is deteriorating every year and the reservoir capacity is consequently reduced. If this trend continued, the effective life time of the reservoir as was anticipated at the time of its creation would diminish. Conservation approach: The establishment of forest of fast growing timber species or bamboo must be undertaken as quickly as possible in all the very steep hill slopes where no field crop could be cultivated by the farmers. These forests should also be established on the headwaters of all major rivers and streams. Generally, the run-off reduces from almost sixty percent on clean cultivated slopes to less than five percent on slopes covered with a leguminous creeper. Similarly, the loss of soil is reduced from over eleven tons per acre to less than one-tenth of a ton. So, cover crops have shown as useful and necessary not only on open areas but also on terrace slopes and as an undergrowth plantation crop. Covering the soil with vegetable trash has proved as a successful method of combating erosion and preventing soil wash. Adding organic matter to the soil promotes greater infiltration rates and thus reduces run off as well as increases the fertility and moisture holding capacity of the soil. Waste vegetable materials such as banana leaves and rice straw make excellent mulch. Minimum tillage can be widely practiced as a profitable means of reducing soil erosion in the area. Contour ploughing is the most effective erosion control measure and can be widely applied on the small portion of land which is relatively flat. Contour trenching would have application on steep slopes (30-55% slope) and contour planting of crops, trees and hedges will do much to stop erosion. Strip cropping and the practice of growing crops in rotation or together can in many cases are adapted to an area so that soil conservation is promoted. However, this brief review of selected technologies for sustainable agricultural production should be based on research. But unfortunately very few of these are quantified by research based on socio-economic condition of the area. Traditional method of soil conservation utilizes mechanical vegetative barriers to arrest soil movement, thus using the same principles as the more modern technologies. Many of these traditional methods are falling into disuse, possibly because they are too labour intensive and hence too expensive. Sustainability evaluation: The physical, biological and socio-economic factors composed in the area are urgently needed for formulating development strategies for sustainable agriculture. To develop an approach of sustainable agriculture various physical parameters related to land qualities can be evaluated based on land utilization type. Biological factors e.g. productive, beneficial and destructive biota need to be studied through field investigation and exiting information. A spatial and temporal relationship of biological factors is also needed to be established for sustainability evaluation. Economic environment of farming systems is needed to analyze based on attributes related to economic factors e.g. resources, economic environment, attitude and complex quantities. Various social factors related to characteristics of land management can be assessed through socio-economic survey. Finally, a relationship between complex and component attributes should be established to design a sustainable agriculture strategy in the area concerned. Here, emphasis should be given on the changes of agro-ecosystem over time due to environmental degradation and technological solutions for sustainable agriculture in the entire watershed area of Kaptai reservoir. Very little such solution have been developed and also stated here, more modern technologies are needed based on refinement and adaptation to the local socio-economic conditions. Finally, actual implementation and adoption of the policies and resultant technologies for sustainable agriculture by the farmers is the most crucial and most difficult step. Community based natural resource management (CBNRM) and participatory land use planning (PLUP) approaches can be the better solutions in present situation where different entities i.e. resource, land owners (private or government), farmers and government could come together to consider each other's need and negotiate, discuss and agree on the use and management of resources in a sustainable manner. Overall, political will and government support are also crucial to the success of such efforts. Dr. Md Rafiqul Islam is Assistant professor, Department of Agronomy, Bangabandhu Sheikh Mujibur Rahman (BSMR) Agricultural University, Gazipur.