This study was conducted in Kewot District, North Shewa, to assess the contributions of area closures for soil and woody vegetation rehabilitation. A cross-sectional survey was employed to collect woody vegetation and soil data; as well as local community perception towards area closures. Samples for woody vegetation and soil quality were taken from 10 years and 23 years old area closures and the adjacent open grazing lands on systematically laid plots. A total of 168 households were selected and questionnaire was used to assess local communities’ perception. Data were analyzed using excel spread sheet and SPSS software. The results indicate that a total of 2,394 woody vegetations, of which trees, shrubs, saplings and seedlings constituting 26%, 44%, 17%, and 13% in the area; belonging to 46 species, 26 families and 38 genera were recorded and identified. The overall density of woody vegetation in area closures was 4,683.2 ha-1 while it was 785.9 ha-1 in open grazing lands. The frequency, height and DBH analysis of trees in area closures exhibited a regeneration curve of inverted ’J’ shaped distribution. The species richness and diversity difference was significant (P<0.05) and further the LSD comparison of stem groups, except saplings among enclosures, indicated very significant (P<0.01) difference across study sites. Soil chemical properties such as AvP, AvK, and pH showed no significant differences but SOM and TN showed significant difference (P<0.05) across study sites. The correlation analysis among soil parameters revealed a significant positive linear correlation (P=0.002, r=0.716), (P=0.004, r=0.672),(P=0.03, r=0.543),(P=0.016, r=0.592) between SOM and TN, SOM and C/N, TN and C/N, TN and AvK in the area. SOM content in area closures was significantly higher than their adjacent grazing lands. There was positive correlation between SOM and diversity of woody vegetations indicating the influence of management and age to rehabilitate soil qualities and woody vegetation diversities. Local farmers were aware of the socioeconomic and ecological contributions of area closures and were optimistic to the establishment and performance of area closures which is a basis for future rehabilitation projects. The study showed that area closures play a key role to rehabilitate woody vegetation diversity and soil qualities of degraded sites. Keywords: Area closure, Open grazing land, Rehabilitation, Species diversity, Woody vegetation.