The study on technical efficiency of smallholder Potato was carried out in Nyabihu District of Rwanda. The study estimates the technical efficiency obtained from stochastic frontier production approach. The paper estimates the levels of technical efficiency for 150 smallholder potato farmers, and provides an empirical analysis of the determinants of inefficiency with the aim of finding a way to increase smallholders’ potato production and productivity. The study used of both primary and secondary data. Primary data was obtained directly from respondents (farmers) while secondary data were obtained from books, journals and records of Ministry of Agriculture. Data was collected through trained enumerators using pre-tested questionnaire. The survey was conducted during the month of April and May 2010 Data collected was analysed using STATA and SPSS computer programs. Maximum likelihood estimates are obtained from half – normal stochastic production model. Results indicated that 71 percent variation in the output of Irish potato production was attributed to technical inefficiency with a mean of 60.5 percent technical efficiency. It is shown that area under potato, seed, and family labor and fertilizes, contribute positively towards the improvement of efficiency. The analysis also reveals that, farming experience, house hold size, gender, marital status, farm size, extension services are socio-economic factors influencing the farmers’ technical efficiency. However, education, access to credit and firm size brought negative impacts in affecting the efficiency level of farmers. To achieve increased efficiency of production, this study recommends government to allocate more funds in strengthening the extension services and increasing agricultural credit services to potato growers.