Natural forest is retaining due to the regeneration of seed bank and stump shoot and sprout. A study was conducted in Keta forest Horro Guduru Wollega Zone, western Ethiopia to assess the diversity, regeneration status of indigenous woody species. The natural regeneration of plant species in natural forest stand of Keta forest was studied by systematic sampling design since as Nov. 2019 E.C. Sample plots having 400m<sup>2</sup> area were taken from the forest. Result indicates that, there was 32 regenerating plant species investigated from the surveyed forest. The abundantly regenerating species is <i>Calputiana quera</i> (1722 seedling/hectare) followed by <i>Carissa edulis</i> (91102 seedling/hectare). Similarly, from their important value index (IVI) value, the over dominant species in terms of regenerating is found to be Calputiana <i>qurea</i> (IVI 41.72). There was high species diversity seedling in the areas found apart from the municipality than the closer sites. Similarly, there is high species richness in the site apart from the town than closer to town which describes there is a highly significant difference between site categories. The woody species distribution of the two categories is almost fairly distributed. There is a significant difference between areas closer to the town and apart from the diversity indexes; species richness, and density. Contrarily, species distribution within the surveyed site is evenly distributed.