This study examines the species composition, diversity and economic importance of homestead forests in the household economy of central Bangladesh. The study documents 57 homestead forest species and their main usage in 90 households across three villages of Gazipur Sadar Upazila. Homestead forests in Bangladesh comprise a mixture of fruit, timber and bamboo species. While superficially homestead forestry appears unimportant in rural livelihoods, in reality the contribution is huge, both as a source of food security and for other necessary household materials. A clear understanding of the physical characteristics and economic role of homestead forests in rural livelihoods is vital for ensuring sustainable resource management. Income and production of homestead forestry on a per hectare basis are found to vary widely between landholding size classes. Significant relationships are identified between forest performance (production and income) and species richness and education level. Homestead forestry appears to be a potential subsistence income generating land-use practice in the study area. The economic scope of homestead forestry can be further enhanced provided the appropriate species composition of the forest is achieved and the education of forest owners is ensured through targeted management and policy interventions.