The main objective of this study is to identify major factors and constraints that determine croprnproduction and estimate the technical efficiency of smallholders in the highlands of Ethiopia.rnUsing cross-sectional data collected from 1660 households, this study has attempted to estimaternthe stochastic frontier Cobb-Douglas production fiction, and it examines the determinants ofrnfood production. Most of the coefficients of the variables included in the production functionrn(except that of credit and rainfall) are statistically significant and have the correct sign asrnexpected.rnThe result, suggests that the major determinants of food production in the Ethiopian highlandsrnare the traditional inputs, namely oxen, land and labor (family and hired). Furthermore,rneducation level and age of household heads that are expected to proxy management andrnexperience have exhibited positive and significant relationship with output.rnThe findings of the study have also indicated that there is a significant amount of technicalrninefficiency among private farmers. The mean technical efficiency of the households covered inrnthis study is estimated to be 0.45. This implies that, it is possible to attain a maximum of 55%rnincrease in output by improving the efficiency of private farmers.rnA comparison of technical efficiency of households, led by educated and uneducated, holdersrnhave disclosed that the impact of education on the productivity of farmers is stronger at a higherrnlevel of education than lower level.rnBased on the findings of this study policy emphasis on education, extension service, land qualityrnimprovement and increasing the availability of oxen etc. are recommended.