Timor-Leste is the newest country and one of the least developing countries in the Southeast Asia region. The country has been facing multidimensional challenges in land governance leading to deforestation, land degradation, and poverty.  Further, Timor-Leste is also prone to climate change effects including unpredictable rain, storm wind, flooding, and drought. Agroforestry is a viable option to balance poverty alleviation and ecological functions of the forest and lands in Timor-Leste. The study presents the challenges and opportunities of agroforestry-based reforestation to improve ecosystem services of degraded landscapes and alleviate poverty in Timor Leste. The study reveals agroforestry has been traditionally practiced in different forms including alley cropping, tree border, alternate row, and irregular patterns. Further,  agroforestry initiatives have been conducted with support from different international donors in almost whole municipalities. Agroforestry practice has the potential to increase the diversity of trees on farms which potentially improves ecosystem services and soil health. It also potentially generates income through the production of food crops and employment opportunities for the young generation of the local population. As the main livelihood sources for the rural population rely on land-based resources, therefore the improved income and livelihoods from their lands potentially will encourage forest to expand agricultural land. However, the lack of capacity and knowledge on improved agroforestry systems for both farmers and extension workers is one of the constraints in promoting agroforestry for the restoration of degraded landscapes in the country. Lack of financial access is also another challenge to sustain agroforestry. Economic return from planting trees is long-term while landowners demand fast cash flow to fulfill daily needs.  Land tenure insecurity has discouraged private sectors from investing in large-scale agroforestry. The study suggests that a direct incentive is necessary to promote agroforestry for landscape restoration, in addition to land tenure security.  Capacity building to extension workers and intensive assistance to farmers, as well as market accessibility are required to foster agroforestry in Timor-Leste. Further, establishing a community-based monitoring system is necessary to generate information on the progress of agroforestry such as potential carbon sequestration and food crop productivity needed by market or investors.