Home gardens in southern Ethiopia are regarded as efficient farming systems, allowing interactions and synergies between crop, tree and livestock components. However, these age-old traditional home gardens are evolving rapidly in response to changes in both the socio-economic and biophysical environment. Altered cropping patterns, farm size and component interactions may affect the systems’ sustainability. Home gardens exhibit a huge diversity in farms and farming systems, which needs to be understood in order to design interventions for improvement. Dynamics of home gardens were studied over two-decades (1991–2013) based on a survey of 240 farm households and focus group discussions. Farms were grouped into five types: Khat-based, Enset-cereal-vegetable, Enset-based, Enset-coffee and Enset-livestock. Farm trajectories revealed a shift from food-oriented Enset-based and Enset-livestock systems to (1) cash crop oriented khat-based systems, and (2) combined food and cash crop oriented Enset-cereal-vegetable systems. In densely populated, market proximate areas a major trend was expansion of khat, from 6 to 35% of the area share per farm, while the combined area share of enset and coffee decreased from 45 to 25%. Concurrently, the cattle herd size fell from 5.8 TLU to 3.9 TLU per household. In medium populated, less accessible areas the trend was consolidation of combined production of food and cash crops. Enset and coffee together maintained a share of over 45%. Easy transport and marketing of the perishable cash-generating khat compared with traditional crops favoured its cultivation among smallholders located close to markets. The insights in home garden change in response to increasing population pressure, decreasing farm size and market development may help to design interventions to increase system sustainability.