Smallholder farmers who accounts for 96 percentage of total area cultivated land and generated 95 percent of total production dominate the agriculture farming in Ethiopia. However, the agriculture has not been used to its full potential for development in Ethiopia due to low productivity and low-level commercialization of smallholder. Enhancing productivity and commercialization among smallholder farmers is widely perceived as a key strategy which is achieved through promoting agricultural cluster farming approach. The objective of this study is to analyze the impact of cluster farming on farmer’s productivity and commercialization and to explain factors that affect cluster farming participation in Dera woreda of South Gondar Zone of Amhara National Regional state. Cross-sectional primary data is collected from a sample of 203 household’s selected using multistage sampling techniques from a cross-sectional data. The data is analyzed using descriptive statistics and econometric models. The logit model, PSM and IPWRA estimation methods are used to analyze impact of cluster on maize productivity and commercialization. The results indicated that education level, farming experience, training access, cooperative membership and offfarm engagement are the variables that influenced farmers decision to join agricultural cluster farming positively and significantly whereas age of the household head and distance of extension office from household home negatively affected the participation decision. Impact assessment result showed that CLFP increased yield up to 8.46 qt/ha (21.34% change) using PSM and 6.59qt/ha (15.83%) using IPWRA. Commercialization level is 11.92% (40.31% change) higher compared to NCFP using PSM and 14.18% (50.84% change) using IPWRA. The commercialization level of maize in the study area is categorized in semi-commercialized level. In both estimation methods, cluster farming positively affects maize productivity and commercialization at 1% level of significant. Based on the findings, the study recommends that strengthening and scaling-up the cluster farming will have significant role towards improving maize yield and commercialization. Therefore, to enhance the benefit of cluster farming in improving productivity and commercialization, the government and other stakeholders should give a priority in strengthening education, extension, cooperatives, experience sharing, training, and supporting off-farm activities.