This study was examined how agricultural diversification using underutilized crops could increase household food security and livelihoods in Ethiopia's GutoGida district. Staple crops are what are raised. Regardless of their nutritional content, productivity and production sustainability, the majority of farmers plant reliable food crops. Farmers still experience food insecurity since the crops are not productive enough to lower household food insecurity. Additionally, despite of the fact that underutilized crops improve nutritional quality and boost household purchasing power, their nutritional role, productivity, and stress tolerance were not universally recognized and promoted in this region. On a sample of 120 smallholder farmers, multistage sampling approaches were used. Households are divided into non-producers and producers. The Food consumption score and coping strategy index were used to gauge the level of household food security. The data were analyzed using descriptive statistics, simple leaner regression models, and ordinary least squares. In comparison to non-producers of underutilized crops at alpha 5%, the diversified producers of underutilized crops had significantly higher levels of crop production (22.48%), consumption (11.73%), total annual sale (19.32%), and total income generation (26.67%). Based on this finding, we draw the conclusion that a crop diversification using neglected crop is a practical strategy that can greatly improve household food security and economic well-being. The survey's overall findings show that the Ethiopian government current agricultural policy should pay enough attention to diversify and promoting underutilized crops, and that this has to change in light of the country's ongoing threat from hunger and food insecurity.