The study aimed to analyze the economic efficiency of sesame production in west Armachiho and to identify major factors that cause efficiency differentials of sesame farmers. The study was conducted using a cross sectional data collected in 2017 production year from a total sample of 301 households. Cobb-Douglas production function was employed to estimate economic efficiency of farmers in sesame production whereas the Tobit model was used to identify factor affecting efficiency levels of the sample farmers. The finding of the study indicated that there is inefficiency in the production of sesame in the study area. The estimation of the stochastic frontier models shows that the mean technical, allocative and economic efficiency of farmers were 0.772(77.2%), 0.887(88.7%) and 0.684(68.4%) respectively. Results of the Tobit model revealed that age and education (secondary) affect technical inefficiency negatively and significantly, while marital status (divorced and widowed) affect technical inefficiency positively. The result also indicated that household size and education status(tertiary) have negative and significant effect on allocative inefficiency The result of the study also shows that age, education status (secondary) and extension visit affect has a negative and significant effect on economic inefficiency whereas marital status (divorced and widowed) and farming experience affect economic inefficiency positively and significantly. A key government intervention in this regard might be capacity building of sesame cooperative societies so that they may fulfill their mandate of providing inputs at the lowest costs as expected due to collective purchase.