The major impact of humans on forest ecosystems including loss of forest area, habitat fragmentation, and soil degradation leads to losses of biodiversity. These problems can be addressed by integration of agriculture with forests and maintaining the existing forests. This study was initiated to assess woody species diversity of traditional agroforestry practices. Three study sites (Burkitu, Chire, and Erba) were selected based on the presence of agroforestry practice. Forty-eight (48) sample quadrants having an area of 20 m × 20 m, 16 sample quadrants in each study site, were systematically laid using four transect lines at different distance. The diversity of woody species was analyzed by using different diversity indices. A total of 55 woody species belonging to 31 families were identified and documented. There were significantly different ( < 0.05) among the study Kebeles (peasant associations). Mangifera indica, Entada abyssinica, and Croton macrostachyus were found to have the highest Important Value Index. The results confirmed that traditional agroforestry plays a major role in the conservation of native woody species. However, threats to woody species were observed. Therefore, there is a need to undertake conservation practices before the loss of species.