This study was undertaken in Humbo District, Ethiopia. The objective of this study is to assess the effects of reforestation initiatives on the socio-economy of the rural households brought by the existence of the Community Managed Natural Regeneration (CMNR) project. Four Kebeles (administration units in a district) were selected for the study, based on their geographical location. One Kebele Administration (KAs) from four corners (North, South, East and West) of the closure area was selected. A total of 203 households were involved in the survey. Data were generated through questionnaire, FGDs, KIIs, and physical observation. The study depicted that respondent households were participating in the designation process and subsequent management of the Humbo CMNR project which in fact is considered to be good indicator for its sustainability. They also have good perception on planting trees, reforestation programs and on the ownership of forests as well. It was noted that in some of the surveyed KAs, drought, water constraints and strong wind are the main challenges of the communities. There are available institutional setups and bylaws to manage and protect the forest which was formulated by many stakeholders including local communities. To mention some; bylaws workable for penalizing illegal intrusion into the closure, igniting fire on the forest and benefit sharing.