This review paper focuses mainly on the socio-economic and ecological role of NTFPs contributes to the rural household economy and the types NTFPs. NTFPs are defined to encompass all biological material that may be extracted from natural ecosystems, managed plantations, wood lands, etc., and be utilized within the household, be marketed, or have social, cultural or religious significance. NTFPs Ethiopia covers wide range of products namely wild coffee, honey, gum and resin, spice and wild food, fodder, fuel wood, medicinal plants, construction materials, farm implements, handcrafts, household equipment, and among others. Most NTFPs covered in the review are found to be plant origin except honey and represent an important element in the livelihood of the rural people. These NTFPs are used either for subsistence to be consumed at household level or sold to generate income or both. Based on the existing literature NTFPs are essential components of livelihood activities for the rural people living in and around the forest. In quantitative terms, the level of input the NTFPs contribute to rural people is comparable with the other major livelihood activities like livestock and crop production. On top of this its share to the poor category is found to be major and highest than the richer and this shows the product is more important for the poor. This has an implication that the role NTFPs plays in a rural poor is an immense (broad). The importance of NTFPs is not limited to the improvement of livelihood of the rural people. But goes beyond the economy and it has environmental implication (forest development). Through commercialization of some selected NTFPs such as wild coffee and honey it is possible to protect and sustainably manage the forests. Commercializing these products increases the incomes the rural people generate from the forest without causing adverse effect and in turn contribute to Forest management.