The study was conducted in Shashemene district, Ethiopia. Management-related data were collected using informal and formal surveys. Woody species diversity and related parameters were collected from 60 households. Woody species with ≥5 cm diameter at breast height (DBH) were measured and recorded and below 5 cm were counted and recorded in 10 m ∗ 10 m and 1 m ∗ 1 m plot, respectively. A total of 36 woody species were recorded, of which 58% were indigenous to the area. The overall mean number of woody species per plot was 3.13. Four woody species, namely, Cordia africana , Croton macrostachyus , Persea americana , and Catha edulis , showed highest importance value index. Farmers’ preference ranks for selected woody species were recorded in order of Cordia africana , Eucalyptus camaldulensis , Croton macrostachyus , and Cupressus lusitanica , respectively. The similarity in woody species composition between the study villages ranged from 0.46 to 0.60. To sustain the management of woody species, farmers implemented pruning, thinning, composting, weeding, digging, and watering activities in the area. Garden availability and market and road accessibility are the major determinants of woody species in homegarden agroforestry. The study revealed woody species diversity, management practices implemented, and factors affecting woody species diversity management in homegarden agroforestry. Therefore, government should be worked on infrastructure, resource reallocation, and awareness creation in communities for the better improvement of species diversity and its sustainable management in homegarden agroforestry.