Understanding the importance of homegardens in the production of food, medicine and other useful products for human beings is indispensable. In Ethiopia, research and documentation on homegardens are very few.The present study was intended to fill the gap in knowledge and come up with lists of plant communities and their scientific name. This study was conducted in Sebeta Awas Wereda, in Oromia Central Region, Ethiopia from March 1, 2009 to September 30, 2009. Fourteen key informants (10 males and 4 females) were selected based on recommendation from community elders and local development agents. Forty-two homegardens were randomly selected for ethnobotanical data collection. Data were collected using homegarden tour, semi-structured interviews, market surveys, and preference ranking, direct matrix ranking and paired comparison. One hundred fourteen plant species belonging to 46 families were recorded in the study area, of which 34 (29.8%) trees, 26 (22.8%) shrubs, 46 (22.8%) herbs and 8 (7.0%) climbing species. Of the total plant species, 25% were food producing species (fruits, vegetables, pulses and cereals) 13% medicinal species and 10% utility species. Fabaceae had the highest number of species, followed by the families Asteraceae, Rutaceae and Poaceae. Catha edulis, Rhamnus prinoides and Ruta chalepensis were among the cash earning plants frequently found in homegardens. It can be concluded that homegrdens of the study area are rich in biodiversity. The present study showed the existing status of homegardens and local knowledge contribution to the farming systems in conservation of the biological diversity. In addition, plant species providing substantial benefits and factors combine to determining homegarden diversity are documented. Key words/Phrase: Homegarden, management practices, local knowledge and diversity