Ethiopia experiences a very high soil loss of 40–130 t ha-1year-1 from croplands that costs the country about 1.0-1.5 million tons loss of grain production per year. Founded on its three interlinked principles, Conservation Agriculture (CA) is widely documented to reduce soil loss, improve soil quality and contribute to sustainable agricultural production. Despite more than three decades of research and promotion efforts on CA in Ethiopia, long-term comprehensive studies are scanty to sufficiently demonstrate its benefits for soil quality enhancement. Drawing lessons from long-term CA studies both within and outside the country would help to make informed decisions for wider use of CA and guide future research and promotion activities. Available pertinent CA literatures from peer-reviewed journals, research reports, dissertations, and proceedings were reviewed. This review was aimed to collate and analyse studies documented the effect of CA practices on soil quality improvement and associated challenges, and suggest the way forward for its application by smallholder farmers in Ethiopia. The review indicated that, when properly implemented, CA improves soil quality in 3-5 years and contributes to sustainable agricultural production. Besides, yield improvement is possible in early stages of CA application in the low moisture areas under sufficient crop residue retention. However, CA adoption in Ethiopia is generally low which is mainly attributed to limited availability and competing uses of crop residue, limited availability and use of CA based recommendations, mis-location of CA promotions, limited participatory extension services and enabling conditions. Overall, the review suggested the need for a concerted multi and inter-disciplinary research effort to develop CA innovations suiting to the different biophysical environments and socioeconomic circumstances. Effectively demonstrating the power of CA on relieving soil problems, and providing alternative solutions for the challenges surrounding it are requisites to get its full benefits. Capacity building on innovative CA practices is crucial for researchers, extension workers, development practitioners and the smallholder farmers