This study aims to examine the annual income contribution of wood fuel production from small - scale plantation forestry in Fagta Lekoma district of Amhara region, Ethiopia. Household surveys were conducted by following the snowball-sampling technique. The data analyzed by using STATA software and multiple linear regression model also employed to evaluate the contribution of wood fuel annual income from the total annual income of the households. About 9000 Ethiopian Birr (ETB) household income comes from charcoal selling which is the highest average annual income. The result of multiple linear regression analysis indicates that an increase in one unit (ETB) income from charcoal making leads to an increase in total annual income by 0.972 units (ETB). Annual income contribution of wood fuel production is the largest amount of income recorded followed by annual income from crop production. Plantation forestry plays a significant role not only economically but also by the provision of alternative livelihood options for households. Plantation forestry used as a means of soil reclamation as well as means of households income. Inaction and implementation of policies supporting plantation forestry sustain rural livelihood by increasing their adaptive potential for shock and stress by creating alternative means of livelihood.