Informal and formal surveys were conducted at Jeldu and Guder in Oromiya region in 2006/2007.The study were conducted with the objectives to describe and understand indigenous Agroforestry practices, opportunities and threats in the context of farming system. Informal surveys were conducted through focus group discussion, key informant interview, and transect walk while formal survey was conducted using structured questionnaires from one hundred households (50 per district). The common agroforestry practices recorded in the study sites were scattered trees on farmlands, trees on gullies, river banks, home gardens, live fence, grazing lands, woodlots, farm boundaries and live fences. While the most commonly grown tree and shrub species were Hagenia abyssinica, Dombeya torrida, Maytenus ugalineses, Eucalyptus globulus and Buddleja polystacha are at Jeldu and Acacia abyssinica, Cordia africana, Croton macrostachys, Olea africana, Podocarpus glaciliar, Albizia scimperiana, and Vernonia amygdalina. The major tree related in the area were, poor access of tree seedlings, wood shortage, Soil erosion, feed shortage, and depletion of soil fertility are the critical problems in the study area