Although Potassium (K) is a macronutrient, however it is not widely used as a commercial fertilizer for agricultural crop production such as tef (Eragrostis tef (Zucc.) in many parts of Ethiopia. Therefore, this study was conducted to determine the critical value of potassium (K) and optimum potassium to magnesium ratio for tef production and its residual effect on Vertisol of Yilmana Densa District. Seven treatments (0, 50, 100, 150, 200, 250 and 300) kg K2O ha-1were arranged by randomized complete block designed replication was four times. The potassium fertilizer was applied two weeks before planting of crop using broadcast method fertilizer. Soil samples were collected from (0-20cm) depth two weeks after planting and after harvesting of the testing crop. Standard soil analytical procedures were followed in soil analysis. Agronomic data of tef were collected. All the collected data were analyzed for analysis of variance and mean separation using SAS (9.0 version) software. The result revealed that soil properties such as pH and exchangeable acidity didn`t show significance difference (p>0.05) with the application of potassium fertilizer. On the other hand, available potassium and potassium to magnesium ratio showed significance difference (p <0.05) with increasing of potassium fertilizer rate. Agronomic parameters and yield and yield components of tef were didn`t show significance difference with application of different rates of potassium fertilizer. It can be concluded that potassium is not deficient in the Vertisols of the study area. However, it is recommended that further studies should be conducted at different localities of the district in different crops and soil types to determine the status of the soil potassium. Keywords/ Phrases:-optimum level, potassium rate, residual effect, soil properties