<p>Agroforestry practices which integrate agriculture and forestry have emerged as essential for sustaining livelihoods in Ethiopia enhancing productivity and providing significant social, economic, and environmental benefits. The objective of this review is to identify and analyze the primary agroforestry practices in Ethiopia, focusing on their contributions to ecological balance and community empowerment. A literature review was conducted, incorporating studies published in English. This involved searching databases such as Web of Science, Google Scholar, and Scopus using relevant keywords related to agroforestry and its impacts. A rigorous inclusion and exclusion criterion ensured that only credible, contemporary studies were analyzed, resulting in the synthesis of findings from 75 high-quality articles. The results reveal that agroforestry practices, including home gardens, alley cropping, and coffee-based systems, significantly enhance agricultural productivity and improve soil health by enhancing soil fertility. They contribute positively to soil fertility enhancement, biodiversity conservation, climate change mitigation, food security. Home gardens, for instance, can sequester up to 150 tons of carbon per hectare, while coffee-based agroforestry with distinct annual components combined capture around 7.2 tons of CO₂ annually. Overall, agroforestry plays a vital role in fostering ecological balance, empowering communities with economic opportunities, and enhancing nutritional security. Through promoting context-specific agroforestry systems, Ethiopia can enhance biodiversity conservation, improve food security, and build resilience against climate change, contributing to the sustainable development of its agricultural sector. Community engagement and training and monitoring and evaluating impacts are recommended for improved agroforestry practices in Ethiopia to exploit the potential benefits.</p>