Afromontane landscapes are typically characterized by a mosaic of smallholder farms and the biodiversity impacts of these practices will vary in accordance to local management and landscape context. Here, we assess how tropical butterfly diversity is maintained across an agricultural landscape in the Jimma Highlands of Ethiopia. We used transect surveys to sample understory butterfly communities within degraded natural forest, semi‐managed coffee forest (SMCF), exotic timber plantations, open woodland, croplands and pasture. Surveys were conducted in 29 one‐hectare plots and repeated five times between January and June 2013. We found that natural forest supports higher butterfly diversity than all agricultural plots (measured with Hill's numbers). SMCF and timber plantations retain relatively high abundance and diversity, but these metrics drop off sharply in open woodland, cropland and pasture. SMCF and timber plantations share the majority of their species with natural forest and support an equivalent abundance of forest‐dependent species, with no increase in widespread species. There was some incongruence in the responses of families and sub‐families, notably that Lycaenidae are strongly associated with open woodland and pasture. Adult butterflies clearly utilize forested agricultural practices such as SMCF and timber plantations, but species diversity declines steeply with distance from natural forest suggesting that earlier life‐stages may depend on host plants and/or microclimatic conditions that are lost under agricultural management. From a management perspective, the protection of natural forest remains a priority for tropical butterfly conservation, but understanding functioning of the wider landscape mosaic is important as SMCF and timber plantations may act as habitat corridors that facilitate movement between forest fragments.