Agronomic strategies such as choosing the optimal row ratio and planting legume crops at the right time are crucial for enhancing crop productivity. A field experiment was conducted in 2016 and 2017 to assess the influence of plant density and lupine intercropping time on tef field productivity. The treatments were as follows: tef was planted at a 20 cm inter-row spacing, lupine was sown at 20 and 40 cm inter-row spacing (row ratio of 1 tef: 1 lupine and 2 tef: 1 lupine) and lupine intercropped three times (1, 2, and 3 weeks after tef planting). Randomized complete block design (RCBD) with 3 replications were used. Two sole tef and lupine were planted. The results revealed 40 cm inter-row spacing and delayed lupine intercropping (3 weeks after tef planting) provided the maximum tef grain yield of 1.80 t ha−1. The sole cropping of lupine produced the highest lupine grain yield (2.63 t ha−1). Lupine intercropping at 40 cm inter-row spacing and two weeks after tef planting resulted in the highest land equivalent ratio (1.54), tef equivalent yield (2.45 t ha−1), area time equivalent ratio (1.11), system productivity index (2.5), monetary advantage index (15206 birr ha−1), net benefit (65109 birr ha−1), and marginal rate of return (602%). Therefore, farmers in the northwest Ethiopian highlands should consider intercropping lupine two weeks after tef planting in-between two rows of tef as an effective intercropping system.