Human modified landscapes make up a growing proportion of the tropics, but are relatively little studied. The spatial distribution of remnant vegetation can structure and shape local biodiversity, affecting the provisioning of ecosystem services and regulation of pest problems. We compared species composition, abundance and functional diversity of birds between forest and homegardens close to (0–100 m) and further away from (1,500–2,000 m) moist evergreen Afromontane forests in south-western Ethiopia. We thoroughly inventoried birds with point counts and mist netting in two forest sites and three garden sites of each type. Gardens differed in general species composition from forests, with fewer forest specialist species (7% versus 29% of recorded species), but instead supported many other species that were rarely encountered in the forests. Overall gardens had higher numbers of species than forests. Homegardens close to the forest and further from the forest were similar to each other in terms of species richness and overall species composition. Both garden types had a similar composition in terms of the relative proportion of species with different habitat preferences as well as the composition of species from different feeding guilds. The lack of forest specialists in even the most structurally complex part of the agricultural landscape close to forest edges suggests that the last larger forest remnants are critical for conservation of forest specialists. Nonetheless, homegardens maintain rich bird diversity that also should be considered in a biodiversity conservation context. Further research is needed to establish to what extent the richness and composition of the agro-ecological bird fauna is regulated by the existence of forest patches in the region. Our results could not resolve this question since gardens two kilometers from the forest edge were similar in composition to gardens close to the forest edges.