Liming of acidic soil on smallholder farms is one of the major challenges to enhance crop yields in Ethiopian highlands. This may be attributed to the additional investment cost for liming. The study was carried out to investigate the effects of micro-dosing of lime on selected soil chemical properties and yield and yield components of potato on farmers’ field in Banja district, Awi Zone, Amhara Region in 2017/2018. Three methods of lime rate determination and eight treatments on lime rate application were used in the field experiment. The experiment was laid out in RCBD with four replications. Soil samples were collected from 0.15m depth and analyzed before planting and after harvesting of crops and analyzed to assess the effect of lime on soil chemical properties. Crop samples were also collected and analyzed to evaluate the effect of treatments on yield and yield components of potato. Data were analyzed with SPSS version 22.0 and SAS 9.3. The result showed that application of lime significantly (p<0.01) affected selected soil chemical properties and yield parameters. However, the emergence date of potato was not affected by application of lime. Liming significantly increased water pH from 5.26 to 7.21, available P from 8.58 to 19.32 mg kg -1, total nitrogen from 0.11 to 0.14 % and CEC from 23.2 to 38.4 Cmol(+)kg-1. Due to lime application, exchangeable acidity and exchangeable Al decreased from 3.87 to 0.23 and 2.64 to 0.00 Cmol(+) kg -1, respectively. There were strong positive correlations among soil pH parameters while strong negative correlations were obtained between exchangeable acidity and soil pH parameters (buffer pH, pH-H2O, pH-CaCl2 and pH-KCl). The water pH was linearly regressed with buffer and salt solution pH. Similarly, exchangeable acidity was linearly associated with exchangeable aluminum. The lime recommendation equations showed a curvilinear trend and the lime rates curvilinear decreased as values of soil pH parameters increased and the same curvilinear increased as exchangeable acidity values increased. The lime rates applied in rows did not show a significant difference in soil parameters as well as yield and yield components defense from the lime applied in broadcast method. Among the eight treatments, the highest tuber yield of potato was obtained from the application of 15 t ha-1 lime. However, the cost of 15 t ha-1 lime was 22,500 Birr ha-1, while the cost of micro-dozed lime (0.06 t ha-1) was 90 Birr ha-1. Application of micro-dosing lime was found to be economically feasible with net benefit of 92,352 Birr ha-1. Therefore, micro-dosing application of lime was an efficient and economically affordable method for small scale farmers. Keywords: Soil