A study was conducted in Tara Gedam and Abebaye forests l, northwestern Ethiopia to investigate the diversity, regeneration status, socio-economic importance and the factors causing destruction of the forests. A total of 30 plots, measuring 20 m ×20 m, were established along line transects laid across the forests. Participatory Rural Appraisal (PRA) method was employed to generate the socio-economic data. Primary data were collected by field observation, semi-structured interview with key informants and discussion with relevant stakeholders. A total of 143 woody species belonging to 114 genera and 57 families were recorded, and of all the species 44 (30.8%) were trees, 57 (39.9%) trees/shrubs, 33 (23.1%) shrubs and 9 (6.3%) lianas. The diversity and evenness of woody species in Tara Gedam forest are 2.98 and 0.65, respectively, and in Abebaye forest they are 1.31 and 0.31, respectively. The total density and basal area of woody species in Tara Gedam forest are 3001 individuals⋅ha -1 and 115.36 m 2 ⋅ha -1 , respectively, and in Abebaye forest the values are 2850 individuals⋅ha -1 and 49.45 m 2 ⋅ha -1 , respectively. The results on the importance value index (IVI) and DBH class distributions suggest that the species with low IVI value and poor regeneration status need to be prioritized for conservation. In the socio-economic survey, the responses from the key informants indicated The online version is available at Responsible editor: Yu Lei that the forests are the major sources of fuelwood (90%), construction material (80%), timber (75%) and farm implements (55%). The forests are also sources of medicines, animal fodder, bee forage and edible fruits. Tara Gedam monastery, assisted by the local people who have strong religious belief and high respect to the monastery, has played a great role in the maintenance of the sacred forest since a long time. At present, the conservation efforts are made jointly by the monastery and institutions concerned with conservation. The major factors that cause destruction of the forests are livestock grazing, tree cutting for various purposes and farmland expansion. The implications of the results are discussed, and the recommendations are suggested for conservation, management and sustainable utilization of the forest ecosystems.