Poverty is pervasive in rural Ethiopia. The Growth and Transformation Plan stipulated thatrnincreasing agricultural productivity of farmers is one entry point for poverty reduction. Inrnthis Regard, studying the sources of productivity growth and its implication for povertyrnreduction is very important for policy making. So far, studies in Ethiopia focused onrnproductivity per se. Other studies on household poverty also paid more attention on thernimpact of productivity-enhancing factors such as roads and improved agricultural waterrnmanagement technologies on household poverty. However, studies on the impact ofrnproductivity growth on poverty reduction are limited. In an attempt to fill this gap, thisrnstudy analyzed sources of agricultural productivity and its impact on household poverty.rnStochastic Frontier Analysis (SFA) was employed to decompose the Malmquist Total FactorrnProductivity Index using the Ethiopian Rural Household Survey data. The results showedrnthat agricultural TFP grew for the sample households. The analysis further showed that thernmain source of TFP growth was improvement in technical efficiency. The results alsornrevealed that there is no growth in technology (the state of knowledge) of the farmers thatrnsign ificantly shifts the production frontier upward. Results of Two Stages Least Squaresrn(2SLS) fixed effects regression also indicated that growth in technical efficiency reducesrnhousehold poverty. Other productivity indicators, land and labor productivity, also reducesrnhousehold poverty, albeit not as responsive as technical efficiency.