Abstract The Blue Nile Highlands of Ethiopia are a densely populated, predominantly rural region dominated by smallholder crop-livestock mixed farming systems. Population growth, coupled with low productivity, have long posed a threat to natural forest ecosystems in the region, as trees have been removed for fuel wood and to clear area for grazing or crop production. In recent years, however, there has been a trend to replace cropland with eucalyptus plantations. This change has major implications for the hydrology, soils, and agricultural economy of the region. This study examines changes in tree cover for a highland area at the center of the Blue Nile Highlands. Landsat imagery from 1986-2017 is applied to characterize changing tree cover patterns over space and time. We find that total tree cover in this highland region has shifted dramatically over the past 30 years. Between 1987 and 1999 there was dramatic loss of tree cover, particularly in areas of natural vegetation at high and low elevation. This period coincided with the fall of the Derg government and the transition to the current political system. In the period since 1999 there has been an increase in tree cover, with rapid gains in recent years. This increase has taken two distinct forms: regrowth in previously forested areas, due in part to active conservation measures, and the establishment of eucalyptus plantations in mid-elevation zones. The ecological and economic implications of these two types of tree cover—protected forest vs. woodlot plantations—are quite distinct, with plantation forestry providing biomass energy at a cost to food production and water resources. Effective monitoring of these changes is important for the ongoing development and implementation of effective land use policy in the region.