Borana pastoralists in southern Ethiopia are faced with the challenge of developing more efficient and sustainable use of natural resources. In past decades poorly adapted development interventions and inadequate land-use policies aggravated by population growth have weakened pastoral rangeland management. Ignoring pastoralists' technical and organizational capacities has contributed to progressive land degradation, the erosion of social structures and poverty. The Endogenous Livestock Development concept recognises pastoralists' indigenous knowledge-based strategies and priorities, and uses them as the bases for further development of their production system and social relations, to be utilized, improved and combined with modern technologies. This paper explores the Borana pastoralists' adaptive strategies for improved utilization of natural resources and the manner in which they respond to environmental risk and external influences such as water development and new formal administration. The adaptive responses include controlled integration of crop production and protection of grazing reserves, as well as changing cattle breeding priorities and the adoption of camel husbandry. The pastoralists have started negotiations with the administration to regain control of land utilization by strengthening directives for settlements, land use pattern and extraction rates. To support these initiatives the study recommends that pastoralists and other stakeholders enter into an institutionalized process of negotiation that builds on indigenous knowledge and organizational structures and facilitates validation and implementation of newly generated knowledge.