Tropical forests in southwestern Ethiopia are increasingly shaped by coffee agroforestry. This study compared woody species diversity, structure, and regeneration between natural forest (NF) and semicoffee forest (SCF) in Kersa District using 60 systematic plots (20 m × 20 m). Vegetation data were analyzed using Shannon diversity, Sørensen similarity, Importance Value Index (IVI), and regeneration status. Overall, 75 woody species were recorded, with 69 in NF and 55 in SCF. Floristic similarity was high (0.79), but NF contained more unique species (29%) than SCF (10.9%). Species richness was significantly higher in NF (
p
= 0.045), whereas Shannon diversity, evenness, and stem density showed non‐significant numerical differences. The NF exhibited an inverted J‐shaped diameter at breast height (DBH) distribution, indicating good regeneration (seedlings > saplings > mature trees), with significantly higher seedling and sapling densities (
p
< 0.001). In contrast, SCF showed an irregular structure and fair regeneration, reflecting management impacts such as thinning. Although SCF retains significant biodiversity and acts as a conservation buffer, it suffers reduced structural complexity and recruitment. NFs are irreplaceable for ecological integrity. Thus, conservation should strictly protect NFs while implementing biodiversity‐friendly practices in coffee systems to minimize long‐term biodiversity loss.