In Ethiopia, soil degradation has been ongoing for centuries and caused the population to be food insecured. To cope with the challenges of soil fertility loss and related stress, various indigenous reclamation practices have been developed and implemented by local smallholder farmers. However, the contributions of indigenous soil management in augmenting soil quality and crop productivity were not well studied. This study selected two neighboring districts, Derashe and Arba Minch Zuriya, with different indigenous soil management practices. The Derashe people as an adaptation strategy designed indigenous soil management, locally known as Targa-na-Potayta with zero tillage, and mixed/rotational cropping. However, in the neighboring Arba Minch Zuriya district, smallholder farmers use conventional tillage using animal power. Representative soil samples were collected from selected four adjacent kebeles of the two districts. Eight farm plots per kebele were selected and a total of 32 composite samples were collected following a zigzag pattern to the depth of 30 cm. Bulk density (BD), field capacity (FC), permanent wilting point (PWP), particle size, soil textural classes, power of hydrogen (pH), cation exchange capacity (CEC), available potassium (Av. K), available phosphorous (Av. P), total nitrogen (TN), exchangeable bases (Na, Mg, Ca, and K), and soil organic carbon (OC) were analyzed. To assess crop production and income, a total of 392 household heads were interviewed using a structured questionnaire. The collected data were analyzed using an independent sample t-test. The results showed, soils under indigenous management, clay content was 53.74 ± 2.68%, FC 47.8 ± 1.09%, AWHC 15.2 ± 0.37%, pH 8.02 ± 0.07, SOC 1.8 ± 0.02%, and sum of cations 68.2 ± 1.66 meq/100 g. The values in the tested parameters were statistically significant ( P < 0.05 ) and favor good soil management practice as compared to conventional tillage. Using the three consecutive cultivation seasons, CA and CT groups’ mean production from pooled annual crops was 81.28 and 51.03Q ha-1, respectively. CA and CT groups’ mean gross income from annual crops was 98,250.15 ETB ($2751.78) ha-1 and 71,099.48 ETB ($1993.4) ha-1, respectively. Considering the pooled three consecutive cultivation seasons, CA and CT groups’ income from annual + perennial crops was 93,405.29 ETB ($2870.69) ha-1 and 280,721.73 ETB ($8325.17) ha-1, respectively. CA and CT groups’ per annum income from annual + perennial crops was 49,672.86 ETB ($1444.82) ha-1 and 157,980.60 ETB ($4595.13) ha-1, respectively. To sustainably maximize the productivity of the land, conventional tillage practicing smallholder farmers need to integrate the indigenous soil management approach—Targa-na-Potayta. Besides, the benefits of Targa-na-Potayta as sustainable agricultural land management practice need to be scaled out with policy support.