<p>In the Ethiopian highlands, forest loss and fragmentation threaten biodiversity, making sacred church forests and managed exclosures critical for conservation and restoration. This study aimed to evaluate how church forests and exclosures contribute to biodiversity conservation and forest regeneration dynamics. Four church forests and four adjacent exclosures (8–15&#xa0;years old) were surveyed using 56 plots (20 × 20&#xa0;m; 7 plots per forest) to assess forest structure and regeneration with Importance Value Index (IVI), diversity metrics, and successional classifications. <i>Juniperus procera</i> was a structural pivot in church forests, contributing the highest IVI (42.67%) due to its canopy dominance, basal area, and high density. Other important species, such as <i>Prunus africana</i> and <i>Olea europaea subsp. cuspidata</i>, exhibited a stable and late-successional canopy structure. Church forests showed significantly higher seedling (163.25&#xa0;ha⁻¹) and sapling (96.68&#xa0;ha⁻¹) densities and greater species diversity (Shannon: 3.23 vs. 2.79), highlighting their role as biodiversity refugia. In contrast, exclosure sites were dominated by pioneer species, including <i>Carissa spinarum</i>, <i>Maytenus arbutifolia</i>, and <i>Acacia lahai</i>, but showed favorable regeneration potential with moderate sapling densities and high IVIs. Successional analysis revealed that church forests harbor more late-successional and climax species, while exclosures remain in pioneer and earlier recovery phases. The findings underscore the critical role of sacred forests in maintaining structural integrity and species continuity, while also highlighting the restoration potential of managed exclosure in fragmented highland landscapes. It is recommended for landscape-scale restoration policies that integrate church forests as biocultural refugia and native seed sources, while prioritizing ecological connectivity and regeneration.</p>