The study examined the relationship between urban livelihood adaptation within the Parish Development Model (PDM) framework and local economic development outcomes in Kampala District, Uganda. Urban livelihood adaptation, defined as the strategic modifications, innovations, and adjustments urban poor households made in their income-generating activities, resource utilization patterns, and economic survival strategies in response to PDM interventions, emerged as a critical factor mediating program effectiveness in urban contexts. Unlike rural agricultural settings where PDM originally conceptualized, Kampala's urban and peri-urban environments presented unique livelihood challenges including limited space, complex market dynamics, intense competition, diverse informal economic activities, and multifaceted survival strategies requiring context-specific adaptations. The study investigated how urban households' adaptive capacity encompassing livelihood diversification, enterprise innovation, market adaptation, and resource optimization influenced the translation of PDM support into tangible economic development outcomes including income growth, employment creation, enterprise sustainability, and poverty reduction. The study employed a correlational research design with mixed-methods approach. A sample of 298 PDM beneficiary households and 15 key informants including parish chiefs, community development officers, and successful entrepreneurs from 15 parishes across Kampala District's five divisions participated in the study. Stratified random sampling ensured representation of diverse livelihood categories including petty trade, artisanal production, service provision, food vending, and small-scale manufacturing. Data were collected using structured questionnaires with 5- point Likert scale items measuring urban livelihood adaptation (36 items across livelihood diversification, enterprise innovation, market adaptation, and resource optimization dimensions) and local economic development outcomes (32 items assessing income growth, employment creation, enterprise sustainability, and poverty reduction). Semistructured interview guides captured qualitative insights on adaptation strategies, contextual challenges, and success factors. Reliability testing yielded Cronbach's alpha coefficients of 0.90 for livelihood adaptation and 0.89 for economic outcomes. Data analysis employed Pearson's correlation coefficient, multiple regression analysis using SPSS version 26, and thematic analysis using NVivo 12. Findings revealed a very strong positive relationship (r = 0.823, p < 0.01) between urban livelihood adaptation and local economic development outcomes. Among adaptation dimensions, enterprise innovation demonstrated the strongest correlation (r = 0.847, p < 0.01), followed by market adaptation (r = 0.816, p < 0.01), livelihood diversification (r = 0.789, p < 0.01), and resource optimization (r = 0.761, p < 0.01). Regression analysis indicated that urban livelihood adaptation accounted for 67.7% of variance in economic development outcomes (R² = 0.677, F = 248.16, p < 0.000). Beneficiaries demonstrating high adaptive capacity recorded significantly higher mean income growth (M = 4.42, SD = 0.58) compared to those with low adaptation (M = 2.61, SD = 0.89). Enterprise sustainability showed the strongest outcomes (M = 4.07, SD = 0.68) while poverty reduction recorded moderate improvements (M = 3.36, SD = 0.94). Qualitative findings revealed successful adaptation strategies including value addition to products, customer service differentiation, technology adoption for marketing, flexible operating hours, strategic location selection, and collaborative buyer-supplier relationships. The study concluded that urban livelihood adaptation within the PDM framework significantly influenced local economic development outcomes in Kampala District. Enterprise innovation emerged as the most critical adaptation strategy, demonstrating that beneficiaries who creatively modified products or services, adopted new technologies, differentiated offerings from competitors, and responded flexibly to changing customer preferences achieved substantially superior economic outcomes. Market adaptation capacity enabled beneficiaries to identify and exploit market opportunities, adjust to demand fluctuations, build customer loyalty, and navigate competitive urban market environments. The very strong relationship (r = 0.823) between adaptation and outcomes validated that PDM effectiveness in urban contexts depended critically on beneficiaries' adaptive capacity rather than merely financial capital provision, highlighting the necessity of complementing financial support with entrepreneurial skills development, market intelligence, and adaptive management training. The Ministry of Local Government coordinating urban PDM implementation should develop specialized urban livelihood development frameworks recognizing distinct challenges and opportunities in urban informal economies compared to rural agricultural contexts. PDM implementing agencies should provide intensive entrepreneurship training emphasizing innovation, market analysis, customer relationship management, and adaptive business strategies before fund disbursement. Market development support should include facilitation of market access through trader associations, linkages with wholesale suppliers, connections to institutional buyers, and support for collective marketing initiatives. Technology adoption should be promoted through training in digital marketing, mobile money utilization, online customer engagement, and enterprise management applications. Beneficiary selection criteria should incorporate assessment of entrepreneurial aptitude, prior business experience, and adaptive capacity alongside poverty status to identify households most likely to translate PDM support into sustainable economic transformation. Additionally, ongoing post-disbursement mentoring should focus on supporting beneficiaries' adaptive responses to emerging challenges and opportunities in dynamic urban market environments.