Over the last century, Eucalyptus has rapidly expanded across the globe. It has become the most
planted tree species. Environmentalists fear this for the perceived negative eco-hydrological
impact. Foresters and wood industries support its expansion looking at its socio-economic benefits.
Ethiopia is one of the countries where Eucalyptus dominates forest development gains in the last
century. The main purpose of this review is to evaluate the expansion, benefit and challenges of
Eucalyptus in Ethiopia. Eucalyptus was introduced to Africa, and Ethiopia, around the end of the
19th century, in 1890s. Since then it has continued to expand to cover wider geographic areas
within Ethiopia: highland and lowland. It is providing multiple purposes, economic and social, for
millions of households in urban and rural areas. It has substituted effectively some of the natural
forest’s functions, principally in wood supply; hence this way it has contributed to reducing pressure
and in slowing down deforestation. Yet Eucalyptus sustained blame for ecosystem water and soil
nutrient drains, and allelopathic effect to suppress native flora growth. Studies on these aspects of
the genus are inconclusive. Some argue the extravagant use of water and nutrient, while others
argue otherwise. There are studies that show water and nutrient use of Eucalyptus is based on
availability: for instance, dry season and wet season uses are not the same. The most known about
Eucalyptus is its high nutrient and water use efficiency. Therefore, when evaluated on per volume
of water, nutrient and land allocated for biomass production, Eucalyptus will provide the highest
biomass return. This may make it the preferred species. The paper concludes that the development
of Eucalyptus forestry is crucial in narrowing the gap between forest product demand and supply in
the current context of Ethiopia and most African countries, but such development should be
managed with proper silviculture: Planted in the right site and tended properly to optimize its
positive values and reduce possible negative effects.