<p>Tree lucerne (Chamaecytisus palmensis) is a multipurpose fodder tree promoted in Ethiopia to address livestock feed shortages while supporting climate-smart and income-diversifying farming systems. However, empirical evidence on the factors influencing its adoption and the income gained from tree lucerne sales remains limited. This study examines the determinants of tree lucerne adoption and income from tree lucerne sales in South Wollo, Ethiopia, using data from 400 randomly selected smallholder households. We used a two-part modeling framework that combines a probit model and a generalized linear model. The results show that adoption is significantly influenced by livestock ownership, household size, landholding size, frequency of extension contact, soil fertility status, gender of the household head, market distance, and membership in local associations. Conditional on adoption, income from tree lucerne sales is primarily driven by livestock ownership and extension contact. The estimated mean conditional income from tree lucerne sales among adopters (12,506 Ethiopian birr [ETB]) is nearly three times the unconditional mean income observed across all households (4,340 ETB). This gap underscores tree lucerne’s income potential and supports policy efforts to scale it to a broader set of farmers. As a result, tree lucerne plantations should be promoted as part of the national sustainable land management program and climate-resilient green economy strategy by strengthening extension services and reducing adoption barriers to enhance tree lucerne’s contribution to improving farmers’ incomes.</p>