The use of agricultural crop residues and animal manure for soil amendment is limited in most part of Ethiopia because of high competition for the uses. However, due to low SOM content in most agricultural soils, there is an urgent need for a sustainable management system of agricultural residues to replenish SOM. Vermicomposting is superior among the most efficient recycling techniques for management of available agricultural wastes. The study aimed to investigate the type of crop residues and animal manure available, determinants for their current use, quantity of residue left for composting and farmer’s perception of vermicomposting in three districts of the Benishangul–Gumuz region. Farmers use the largest portion of cereal residue such as sorghum as fuel and tef straw sold at the market and/or as stall-feeding. However, legume residues were consistently preferred for use as a composting material over cereal residues. The average amount of crop residues available for composting was estimated in the range between 0.2 and 0.6 ton year−1 farmer−1, across districts. While the quantity of cow manure used for compost production significantly differs between districts and was estimated 1.7, 1.2, and 0.5 ton year−1 farmer−1 at Bambasi, Assosa, and Homosha districts, respectively. Unlike other parts of Ethiopia, the mixed farmers in the study region well recognized the benefit of animal manures and did not use them as a source of fuel. Residues were found with varying decomposition characteristics that sorghum (10.08% and 1.65%) and tef (9.16% and 1.43%) residues had higher lignin and polyphenol contents, respectively, than maize, soybean, banana, and haricot bean. In terms of their quantity and quality composition, cow and donkey manures, as well as residues of soybean, banana, and maize are the major organic resources potential for utilization in the vermicomposting process in the region. Moreover, the availability of potential organic residues at the farm level could encourage farmer's motive to adopt high-value vermicompost production.