The construction and continuous cultivation of bench terraces in the densely populated Kigezi highlands of Uganda have concentrated the topsoil on the lower side of the terraces leaving an exposed subsoil in the upper part of the terraces. This leads to a strong yield gradient with negligible production on the upper terrace sections. Unlike crops, agroforestry trees grow well when planted as rotational woodlots on the scoured terrace sections. In on-farm experiments these woodlots produces more than 7 tons ha−1of wood and 8 ton ha−1of green matter. Even after five rotational cycles the survival rates of trees is very good. The woodlots double infiltration rates on the most erodible part of the terrace and rehabilitate soil fertility. If this practice is adopted by many farmers, wood production would increase from 24.5 to 31.5 t ha−1. Crop production would also increase from 1.27 to 4.63 t ha−1, the run-off and erosion will be reduced and terrace stability enhanced.