The study was conducted on homegardens of Hawassa city, Southern Ethiopia with the aim of documenting useful plant species; identifying the internal and external household factors related to useful plant species diversity in and around home gardens and examining its contribution to household food security and income generation. A random sample of 120 homegardens from eight sub-cities of Hawassa city was used to collect useful plant species data. Techniques used were focus group discussion, semi-structured interviews, home garden tour, market survey, free listing, priority ranking, and preference ranking. A total of 258 useful plant species were documented, of which 47.29% were ornamental plants, 29.75% food plants, and 15.89% medicinal plants. Fabaceae was the dominant family represented by 9 genera and 20 species, followed by Euphorbiaceae and Asteraceae with 17 and 16 species each respectively. Homegarden size of the study area ranged from 220 to 1235 m2 with a mean size of 571 m2. The age of homegarden is ranged from 15 years old to 55 years old with a mean aged of 28. The number of species in the homegarden ranges from 10 to 45 with the mean of 23. The study indicates that home gardens are contributing to food security, income generation and livelihoods in Hawassa city through production of ornamental, food plants, fodder, medicinal, timber and construction. The study recommended that the management of useful plant species in homegardens will be scaled up and further expanded and assisted by agricultural extensions in urban areas in Ethiopia. Key words: Urban home garden, plant species diversity, household livelihood, food security.