Although there is a wealth of indigenous knowledge on managing parkland woody species, understanding farmers’ strategies on woody species diversity, preference, and purpose of keeping scattered trees with annual crops were insufficiently documented yet. This study was conducted to investigate woody species diversity, farmers’ preferences, and the purpose of keeping scattered trees on farmlands in the Assosa district, Western Ethiopia. Three administrative kebeles were selected purposively. Multi-stage sampling technique was employed to collect the primary data from the sample households. A total of 114 households were randomly selected for species preference and the purpose of keeping trees; of which 59 households were randomly selected proportionally for woody species inventory. Both qualitative and quantitative data were analyzed by using Statistical Package for Social Sciences, Version 20.0, and Microsoft Excel 2010. A total of 31 plant species belonging to 30 genera and 19 families were recorded in the parkland of the study area. Shannon diversity was higher at Selga -22 Ketena-1 than Ketena-2. Selga -20 Ketena-1 has higher species diversity than that of Ketena-2, but with a non-significant difference at (p<0.05). On the contrary, species evenness at Selga -20 Ketena-1 was significantly higher than that of Selga -21 Ketena-2 at (p<0.05). The study revealed that parkland agroforestry practice plays an important role in conserving native woody species and by providing food, income, and a wide range of other products such as fuel wood, construction, fodder, food, and medicinal plants.