Land degradation, which includes loss of vegetation cover, soil degradation, and nutrient depletion, is a severe ecological problem in Ethiopia's northern highlands particularly in Dengora and Karita-Wuha watershed. In Dengora and Karita-Wuha watershed, rehabilitation of degraded lands through exclosure has been undertaken as a response to the ever-increasing land degradation. Despite this issue, no studies have been conducted in the research area to assess the use of exclosures as a practice for preventing soil deterioration and thereby increasing agricultural production. This study was conducted in the Dengora and Karita-Wuha watershed East and West Belesa woreda, Central Gondar zone, in northern Ethiopian highland to assess the effectiveness of exclosures in improving degraded landscapes. In each landscape position (upper slope, middle slope, and foot slope) 20 by 20 m, 10 by 10 m and 5 by 5 m sampling plots were established for cultivated land, trees and bush & shrub respectively to conduct vegetation inventory. In each plot of the land uses, five small soil holes (four from corners and one at the center) were opened by auger in an ‘X’ design for soil sampling in 20cm depth. A total of 22 quadrat plots were examined at Dengora watershed, of which 9, 8 and 5 quadrat plots were in the exclosure, cultivated land with terrace and communal grazing land respectively. Similarly, a total of 26 plots were examined at the Karita-Wuha watershed, of which 13, 8 and 5 plots were in the exclosure, communal grazing land and farm village respectively. Vegetation was inventoried to analyze aboveground biomass and soil samples were collected for soil fertility and nutrient stock analysis. Aboveground biomass of different land use types was estimated from the height and diameter of vegetation by using an allometric equation. Status of fertility and nutrient stock of different land use types were assessed using OC, TN, AP. Analysis of variance was used to compare means between vegetation indices, aboveground biomass, soil fertility and nutrient stock among land uses. This study shows no significant differences (P > 0.05) among land use types in aboveground biomass, soil fertility and nutrient stock in both watersheds. Because exclosure land was substantially degraded before it was exclosed and has yet to be recovered in a short time. The result supports exclosures can only be successful in rehabilitating degraded areas if they are well managed and protected from human and animal disturbances for an optimum period.