Canopy gaps play a pivotal role in tropical forest ecosystems, influencing succession, carbon dynamics, ecosystem function, and biodiversity. Here we investigated canopy gap dynamics, tree species regeneration, and associated factors in one of the Moist Afromontane tropical forests, the Gerba Dima forest of southwest Ethiopia. Located within a precipitation-rich region with rain all year round, the Gerba Dima forest contains broad-leaved evergreen trees and is characterized by a diverse canopy structure with plenty of canopy gaps whose effect on the forest is not yet investigated. Through systematic line transects, we identified 120 canopy gaps exceeding 25 m2 within Gerba Dima forest. These were created by fallen trees, fallen branches, or standing dead trees resulting from the mortality of one or more trees. For each gap, we estimated gap age, characterized gap-creating tree species (measured their diameter at breast height (DBH), identified modes of death and recorded the abundance of gap-filling seedlings and saplings. Subsequently, we computed the diversity of successional species and employed Bayesian regression models to analyze the effects of canopy gaps on the forest ecosystem. We recorded 29 tree species from 19 families as gap creators, with five species contributing to over half of the canopy formation. The mortality of individual trees accounted for over 50 % of gap formation, predominantly through uprooting with contributions from stand dead and branch snip off. We recorded 3830 seedlings and saplings belonging to 49 species from 19 families as gap fillers. We show that canopy gap size is influenced by both the number and size of gap-making trees and gap-filling tree species richness correlates more strongly with canopy size. Moreover, gap-filling species exhibit greater diversity compared to gap creators, with consistent survival rates across canopy ages, suggesting enhanced forest diversity. In conclusion, spontaneously formed canopy gaps contribute to increased tree diversity without adversely affecting the diversity of canopy gap-forming trees, showing the importance of natural canopy gaps to the diversity of tropical forests.