ABSTRACT This study was carried out in Qimbaba Eucalyptus plantation forest northwest of Ethiopia to determine the impacts of Eucalyptus plantation forest on woody plant species diversity, regeneration capacity, soil seed bank (SSB), species composition and on selected soil physicochemical properties. A total of 40 circular sample plots of 314 m2 were established along a transect line at every 200 m between them. Transects were laid in east–west directions at 200 m distance from each other. Soil seed bank analysis was done from soil samples collected in each of the 40 plots (160 samples) to examine the similarity between the soil seed flora and aboveground vegetation. Soil samples were collected at two depths (from 0-15 cm and 15-30cm) of the plantation forest and the adjacent natural forest in five replicates. Vegetation diversity was assessed through analysis of floristic composition, species richness and abundance. A standard procedure was followed for the analysis of soil samples. A total of 71 woody plant species (33 in Eucalyptus Plantation) and (63 in Natural Forest) were determined with the density ranging between 404 to 635 per ha in the plantation and natural forest, respectively. The population structure showed an inverted J-shape in both the plantation and natural forest. Total woody species basal area of the forests were 4.9 m2/ha and 24.5 m2/ha for the native trees in the Eucalyptus plantation and the adjacent natural forest respectively. The regeneration status in the Eucalyptus plantation was 699 seedlings and 344 saplings per ha while the natural forest had 1117 seedlings and 390 saplings/ha. On the other hand, the species richness of regenerated trees in the plantation and natural forest were 21 and 38, respectively. A total of 14 plant species representing 11 families were recovered from the soil seed bank, 12 (in 10 families) species in the natural forest and 7 of them were in the eucalyptus plantation forest (5 families). Soil seed bank (SSB) was not similar in the two forests with Sorenson’s similarity values of 0.208. There were 11,022 seeds/m2 (natural forest) and 10,667 seeds/m2 (Eucalyptus plantation forest) in the SSB. There was no significant difference between the two forests (Plantation forest=0.995 and Natural forest=1.005), soil organic carbon, soil Nitrogen and Potassium were significantly higher in NF than the plantation forest. Cation exchange capacity and soil available phosphorus were found to be statistically similar, but numerically higher in NF than the plantation. The PH of plantation forest (moderately to slightly acidic) was significantly lower than the natural forest soil (neutral). Key words; Florstic diversity, Eucalyptus, Natural forest, Soil seed bank, Fostering effect