Abstract The intergovernmental panel on climate change (IPCC) defines Climate Change (CC) as the change in the state of the climate that can be identified (using statistical tests) by the changes in the mean and or the variability of its properties and, that persists for an extended period, typically decade or longer”. Agriculture is highly vulnerable to climate and change in climate then implies change in crop yield harvested out of agricultural crops and that crop yield gained determines the income to be earned by farmers whose livelihood depend on agricultural harvest received. In this research focused on implication of climate change on paddy yield and subsequent income, it has been tested by the means of regression analysis done using SPSS software as to how and to what extent temperature and rainfall, major components of climate, and extent of land cultivated determine crop yield harvested by farmers in Hambantota district. Taking average temperature and rainfall for Yala and Maha, agricultural seasons, from 1983 to 2012, 30 years, the researcher found that temperature makes an impact on paddy yield but the rainfall does not make any impact, besides it is statistically insignificant. Although, temperature and extent of land cultivated do not make significant impact on paddy yield, increase in temperature by 1 Co may result drop in paddy yield by 188 Kg per hectare and increase in extent of land cultivated may result in increase of paddy yield. Thus the researcher suggests taking proper measurements to control the rise in temperature by forestation and increase the extent of land cultivated using bare lands in Hambantota district. Finally, climate implication on paddy yield and subsequent income earned is dismissed given the low explanatory power of the model and rainfall being statistically insignificant. However, temperature somewhat determines the paddy yield. Key Words: Climate Change, Temperature, Rainfall, Paddy Yield, Crop Yield, Extent of Land, Income, Rural Poverty.