An investigation into the impact of Parthenium hysterophorus infestation was conducted in 2007 in the north-eastern grazing lands of Ethiopia. Data on the above-ground and seedbank species diversity were collected from five areas, each having sites with low, medium, or high levels of weed infestation. A total of 72 species was found in all areas. They were categorized into grass species (23), other species (48), or P. hysterophorus for ease of interpretation. A regression analysis showed a highly significant, but negative, relationship between the above-ground species diversity and evenness with P. hysterophorus abundance. The mean cover abundance for the three infestation levels was 33.4% for P. hysterophorus, 41.0% for the grass species, and 26.5% for the other species.The most dominant grass species under all infestation levels were Cynodon dactylon, Urochloa panicoides, and Chloris gayana, while Andropogon abyssinicus and Eragrostis spp. were dominant under the low and medium infestation levels, respectively, and Hyparrhenia hirta was dominant under the low infestation level. Among the other species, Solanum nigrum was the most dominant under the low infestation level and Datura stramonium and Xanthium spp. were the most dominant under the medium and high infestation levels, respectively. The above-ground dry biomass of P. hysterophorus increased between the low and high infestation levels, while that of the grass or other species reduced in the high, as compared to the low, infestation level. Although the grass species density decreased significantly with successive increases in the P. hysterophorus infestation level, no such trend could be seen for the other species. Within the soil seed bank, the viable seed density for the grass species, other species, and P. hysterophorus were 25.7, 5.8, and 68.5%, respectively. Similarly, the soil seed bank under the low-, medium-, and high-infestation sites was dominated by P. hysterophorus, which contributed 25.1, 65.4, and 87.4% of the viable seed bank, respectively. Although the overall similarity between the above-ground vegetation composition and the soil seed bank was low, it was similar at the low-infested site. Thus, the invasion by P. hysterophorus was found to critically endanger the biodiversity of the grazing lands, particularly for the different grass and forbs species in the area. These changes might adversely affect not only future agriculture, but also food security, unless appropriate practises are developed and implemented for P. hysterophorus management.