Background Systematic documentation and promotion of indigenous knowledge associated with medicinal plants are limited. The aim of this study was to undertake ethnobotanical investigation on medicinal plants used for the treatment of human and livestock ailments and document indigenous knowledge of local communities on the preparation and administration of herbal remedies in the study area. Methods The study involved 153 informants from nine kebeles, comprising traditional healers, knowledgeable elders and local user communities. Various ethnobotanical techniques were used to collect and analyze data: semi- structured interview, guided field walk, group discussion, preference ranking, and fidelity level index. Data was analyzed using descriptive statistical analysis. Results Local communities had rich and diverse indigenous knowledge on medicinal plants, types of ailments, methods of remedy preparations and routes of applications. There were differences in this indigenous knowledge across age and sex. A total of 83 medicinal plants were documented during this study. Fifty two (62.65%) plants were used for treating human ailments, 20 species (24.10%) for treating health problems of livestock and the remaining 11 (13.25%) for treating both human and livestock ailments. The highest informant consensus was documented for the plants Allium sativum , Asparagus africanus and Azadirachta indica. Leaves were the most commonly used parts of medicinal plants accounting for 51.81% of the total followed by roots (20.48%) and barks (2.41%). Oral administration of the herbal medicine was the dominant route 66.3%, followed by dermal (22.7%) which included washing, holding on, rubbing and brushing. Smoking (8.5%) was also important. It was documented that 27 species (32.5%) were used in fresh, 13 species (15.7%) dried and 43 species (51.8%) either in dry or fresh state. Conclusion Owing to their access, curing ability, manageable charges, existence of deep indigenous knowledge and other associated cultural values, medicinal plants continued to play a significant role in meeting healthcare needs of the community in the study area. Conservation and sustainable use of the diverse medicinal plants need to be promoted. Systemic documentation and protection of the rich knowledge of local communities and further research on selected potential species was recommended as a result of this study.