Mixed cropping of teff (Eragrostis tef) with faba bean (Vicia faba) was compared with sole cropping in the 2002 and 2003 growing seasons at Holetta Research Centre, in the central highlands of Ethiopia. The treatments were sole teff (25 kg seed ha−1), sole faba bean (200 kg seed ha−1) and 12.5, 25, 37.5, 50 and 62.5 % of the sole seed rate of faba bean mixed with a full teff seed rate. A randomized complete block design replicated four times was used. Treatment effects were significant for seed and biomass yields of each crop species. Increasing the seed rate of faba bean in teff/faba bean mixture increased faba bean seed yield but decreased teff grain yield. Nonetheless, mixed cropping of faba bean with teff increased land use efficiency and gave higher total yields compared to growing either species in sole culture. Teff yield equivalent, land equivalent ratios (LERs) and system productivity index (SPI) of the mixtures exceeded those of sole crops especially when the seed rate of faba bean in the mixture was increased to 50 kg ha−1 (25 %) or more. The relatively high crowding coefficient values indicated yield advantages from mixed cropping of the two species. The highest values of teff yield equivalent, LER and SPI were obtained when faba bean was mixed at a rate of 62.5 % with the full seed rate of teff. We suggest that, at the current prices of the respective crops, up to 62.5 % of faba bean can be mixed in normal teff to get better total yield and income than sole culture of either species.