Although the role of bamboo has not been well documented as an integral part of the economy of Ethiopia, it plays a very important role economically and ecologically in areas where it occurs naturally and as plantation. The study was conducted with the main objective of assessing and exploring the role of bamboo agroforestry system in rural livelihoods and environmental protection. Formal survey was carried out on a total of 90 households (HHs) was selected using stratified random sampling. The experimental design of Randomized Complete Block Design (RCBD) was used to examine barley yield at different distance from the bamboo line. The results indicate that The income from bamboo accounted for about 17% of the total household annual income Moreover, the role of bamboo in environmental protection was assessed from farmer’s perception and almost about 82% of the respondents believed that bamboo increases soil fertility. In general, bamboo based agroforestry systems have a great roles in tropical countries. Therefore, the book may help countries in Asia and Africa for further scientific research purpose.