Ethiopia, as in many sub-Saharan African countries is undergoing extensive environmentalrndegradation. This is manifesting itself through rapid deforestation, thinning of tree cover, soilrnerosion and declining soil productivity. Various explanations have been given for the causes ofrnsuch degradation. Among the causes, the population growth-environment nexus has beenrnextensively debated. As a result, contrasting views, i.e., the "Malthusian" and the "Boserupian"rnemerged. Similarly land degradation in sub-Saharan Africa is a subject of an on-going debate.rnConflicting perspectives emerged on the effects of increasing population on land degradation.rnThe bulk of literature emphasizes that land degradation is caused mainly by population pressurernand several related issues, while a recently growing literature views population pressure as anrnimportant resource for conserving the environment through enhancing intensive farming of thernagroforestry system.rnThe thesis aims at analyzing important components of the Gedeo agroforestry system namely IK,rninclusion of varied large trees and crop diversity on household farms in the face of intenserndemographic pressure. The potential effects of demographic variables on the IK of agroforestryrnsystem, inclusion of diverse large trees, and the diversity of crops is analyzed by setting out threernspecific objectives. Data obtained from a survey of 420 sample households, Focus GrouprnDiscussions and Key informant interviews in 4 kebeles ofYirgachaffe woreda is employedfor thernanalysis. Regression models are estimated to analyze the potential effect of demographicrnvariables on IK of agrofores!IY practice, and the relationship between demographic variablesrnand the inclusion of diverse large trees in croplands and to identify variables that explain thernfarm level crop diversity.rnResults indicate that demographic pressure through a positive influence on the components ofrnthe agroforestry system, namely, IK system of the community, inclusion and conservation of morerndiverse large trees in croplands, and diversity of crop species on household farms is likely tornenhance environmental conservation and agricultural production in the Gedeo setting. Hence,rnthe intriguing question of how the study area is able to accommodate the high population densityrnwithout facing serious environmental issues finds part of the explanation from the evidence thatrnpopulation pressure enhances the key environmental components of the agroforestry system.rnThis suggests that taking action to devising a way of transferring IKfrom the bigger sized andrnolder households to the smaller sized and younger households, enhancing information and inputrnsharing on the management of diverse large trees, and raising the capacity of small sized andrnfemale headed households is a useful strategy 10 enhance the important components of Ihe Gedeornagroforestry system and thereby conserve the environment.