This study was aimed at estimating the level of technical, allocative and economic efficiency of small holder wheat producers and identifies factor affecting efficiency of smallholder farmers in wheat production in mekdela woreda, Amhara region, Ethiopia. A two stage simple random sampling technique was used to select 271 sample households to collect primary data in 2018/19 production season. Both primary and secondary data were used for this study. The Cobb-Douglas stochastic production frontier model was used to estimate technical, allocative and economic efficiency level, whereas two limit Tobit model was used to identify factors affecting the level of technical, allocative and economic efficiencies. The stochastic production frontier model indicated that input variables such as land, labor, NPS and seed were statistically significant variables to increase the quantity of wheat output. The estimated mean values of technical, allocative and economic efficiency were 79.45%, 65.48% and 52.02% respectively. The result indicated the presence of inefficiency in wheat production in the study area. The Tobit model result indicated that technical efficiency positively and significantly affected by family size, land fragmentation, access to training, livestock holding, slop of the plot and participation in off/non-farm activity but negatively affected by total cultivated land. The result also indicated that education level, family size and access to training have positive and significant effect on allocative efficiency negatively affected by total cultivated land. In addition, economic efficiency positively and significantly affected by family size, access to training and slop of the plot but negatively affected by total cultivated land and participation in off/non- farm activity. The result showed that there are opportunities to increase efficiency of wheat production. Key words: Economic efficiency, Cobb-Douglas, Stochastic frontier, Tobit