In Ethiopia, pastoralists reside in semi-arid and arid lowlands. The long established multifaceted isolation compounded with negative effects of climate change, population growth and environmental degradation has severely undermined pastoral economic systems, livelihoods and food security. The poor integration of lowland and highland economic systems into the national economy has potentially hindered economic growth and livelihood diversification in pastoral systems. This study was, therefore, aimed at investigating and understanding the nature, scope and constraints of economic and market interactions between lowland and highland economic systems and the implications of the interactions for sustainable livelihoods of pastoralists. The study focused specifically on examining the profile of pastoralistsí economic engagements and their income contributions; exploring types and magnitude of product and service exchanges between lowland pastoralists and highland farmers and accessibility conditions of the major markets visited by pastoralists; assessing constraints to market interactions between lowland and highland communities; exploring the existing lowland pastoral and highland farming systems. The study has also attempted to draw implications of the lowland and highland economic interactions for mitigation of conflicts and pastoral economic growth.