ABSTRACT Access to and use of seeds is critical factors for the ability of smallholder farmers to increase agricultural production and productivity. The use of certified improved faba bean seed by farmers is very low due to different factors. Therefore, this research attempted to generate useful information on faba bean seed value chain by identifying factors that determine farmer’s decision to use improved seed, identifying actors and mapping their interactions and by identifying major constraints and opportunities in the value chain. Multi-stage sampling was followed to select sample households. About 168 respondent sample households were selected randomly from three representative kebeles. Survey Data was collected using semi structured interview schedule. Focus group discussion and key informant interview were also conducted to generate qualitative data. For data analysis, both descriptive and econometrics analysis of Tobit model were used. The result revealed that adoption rate of improved faba bean seed in the study area at household level was 23% while the mean intensity of improved seed adoption was 0.25. It was mainly due to lack of access to improved seed and lack of awareness about improved varieties. The Tobit econometric model result showed that faba bean farm size, seed market price after harvest, awareness about improved faba bean varieties, livestock holding and extension contact were positively and significantly associated with improved seed utilization while family size and walking distance in minute to primary cooperative were associated negatively. Value chain actors involved in the study areas were research institutes in releasing promoting varieties, seed producers, seed processers, quality controllers, traders and end users. The formal seed sector supplies only 2.2% of the seed requirements of faba bean in the study area. Hence, community based seed production, pre-scaling up activity and seed producer and marketing cooperative and farmer to farmer seed exchange were found to be the main source of faba bean seed for the sampled households. The major constraints identified in the value chain were faba bean gall disease, inadequate supply of early generation seed, poor quality of seed, poor linkage and coordination of actors in the supply chain, inefficiency of the formal seed sector and limited involvement of responsible organizations in seed multiplication. The study recommends promotion of improved faba bean varieties, improving access to extension service, further research investigation on faba bean gall disease, strengthening and improving the informal seed system, linking and integrating of all the stakeholders in the chain. Key Words: Adoption, faba bean, improved seed, value chain