Planting trees on farmlands has become a common agroforestry activity because of its widespread use and possible advantages. This study was carried out in the Alemsaga watershed in northwestern Ethiopia. Its primary objective was to evaluate the effect of different farmland tree species on selected soil properties and assess farmers' perceptions of farmland trees. Three representative farmlands with similar physiographic conditions and land use histories having, indigenous Acacia abyssinica and Croton macrostachyus tree standings, were selected in the watershed. Soil samples were collected at two soil depths (0–15 and 15–30 cm) under each tree canopy from three different radial distances (1.53, 3.06, and 16 m) away from the tree trunk in four directions. A total of 36 composite soil samples (2 tree species x 3 horizontal distance x 2 soil depths x 3 replications) were collected for the study. The soil's physicochemical properties were analyzed following standard laboratory procedures. The soil data was analyzed by a three-way analysis of variance (ANOVA) using SAS software version 9.4. The result revealed that soil bulk density (BD), organic matter (OM), total nitrogen (TN), available phosphorus (Av.P), cation exchange capacity (CEC), and exchangeable cations (Ca2+, Mg2+, K,+ and Na)+ were significantly (p<0.001) affected by distance from the trees, soil depth, and between trees species, whereas soil texture and soil pH were not significantly ( p>0.05) different between tree species. Except for soil BD and sand content, all the selected soil physicochemical properties declined with increasing distance from the tree trunks of the two tree species. Assessment of farmer’s perceptions and knowledge about soil fertility and crop productivity under farmland trees indicated that 63.26% of respondents responded to the positive impact of farmland trees on soil fertility and crop productivity. Generally, the physical and chemical properties of the soils were better under the tree canopy than in the open fields. Therefore, in order to enhance soil fertility, farmland tree canopies should be managed and protected on cultivated lands.