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Agarwood (Aquilaria malaccensis Lam.) is highly valued for its medicinal, incense and perfumery properties. Due to the illegal harvest and trade in its wood, this species is critically endangered in the wild. Managing the agarwood on farmland is believed to enhance the economic security of smallholder farmers while also contributing to the conservation of the species. However, information is scanty on the cultivation of agarwood in smallholder farmlands and the effect of stand density and managements on the associated vegetation and soil properties. Therefore, the objectives of this study were to quantify (i) the diversity, density distributions and importance values, (ii) functional diversity and (iii) soil carbon and nitrogen contents, and C:N stoichiometry under different agarwood management regimes on smallholder farms. A total of 40 farms were selected for this study, and these were categorised into four management regimes based on the proportion of agarwood trees as: pure stand (100 % agarwood trees), dominant (61–99%), moderate (30–60 %) and non-dominant (<30 %). The pure stand represents a monoculture plantation whereas the dominant, moderate and non-dominant categories represent polyculture stands consisting of different tree species. Higher tree density was recorded in pure agarwood sands (4140 tree ha−1) compared to polyculture stands (2517–3500 tree ha−1). Tree species diversity, dominance, and evenness were negatively correlated with the dominance of agarwood trees on the farm. Species diversity and evenness were almost twice in non-dominant stands compared to dominant stands. A total of seven use classes, namely, timber, fruit, fuelwood, medicinal, economic, fodder, and spiritual values, were identified for agarwood smallholder farmlands. Moderately dominant stands had the highest soil organic carbon (SOC) and total nitrogen (TN) content and the lowest C:N ratio among the different management regimes. Therefore, we recommend the promotion of agarwood-based polyculture system for enhancing ecosystem services, biodiversity conservation, and uplifting the socioeconomic wellbeing of farm households.