Abstract The condition of the semi-arid Borana rangeland in southern Ethiopia was assessed by studying different land-use systems (communal land, a government ranch and a traditional grazing reserve enclosure) and along a distance gradient (near, middle and far) from water sources. The assessment incorporated the soil, herbaceous and woody plant layers. Two methods were employed to evaluate the grass layer, viz. ecological condition index (ECI) and weighted palatability composition (WPC). The ECI on the government ranch was 21.7% and 26% greater than that of the traditional reserve and the communal land, respectively. The WPC on the government ranch was 83.3% and 48.6% greater than that of the communal area and the traditional reserve, respectively. Both ECI and WPC values were similar for all distance sites from water. Tree equivalent (TE) density, of all encroaching woody plants combined, was higher on the communal land (504 TE ha −1) than the government ranch (373 TE ha −1) and traditional grazing reserve (118 TE ha −1), but with no marked variations in the distance sites from water. Height class distribution of encroaching woody plants in the study areas showed the largest abundance (range: >50–100%) at the height class >0–2 m. Tree equivalents per hectare of encroaching woody plants were negatively correlated ( r=−0.60) with ECI and WPC and positively correlated ( r=0.87) with percentage bare ground. The correlation ( r=0.50) between percentage bare ground and soil compaction was positive and low. Although the government ranch had a greater composition of highly palatable grass species than the other land uses, the rangeland was not in good condition due to severe bush encroachment. The communal land was generally in poor condition. In the traditional grazing reserve, bush encroachment was not a problem, but the productivity of the grass layer was poor when assessed on the basis of ecological and palatability merits. The negative interaction of TE density of all encroaching woody plants combined with ECI or WPC and the positive interaction with bare ground, may suggest that the abundance of these species is more critical in aggravating deterioration in grassland productivity. Therefore, the priority of any bush control program must be towards minimizing the abundance of these woody plants.