Teff is the major crop produced in study area whose productivity is being affected by low soil fertility and organic matter depletion. Hence, an experiment, having factorial combination of 0, 2.5, 5 and 7.5 t ha-1 of compost and 0/0, 16/11.5, 32/23 and 64/46 kg ha-1 of N/P2O5, was conducted in 2014/15 main cropping season to assess the effect of rates of compost and NP fertilizers on growth, yield and yield components of teff and to determine their economical rates. Treatments were laid out in RCBD in three replications. The results indicated that the main effect of compost rate significantly increased dry biomass and straw yield and decreased harvest index. Except on number of productive tillers, the main effect of NP fertilizer was significant on all the parameters measured. The shortest days to heading, highest; lodging percentage, plant height, panicle length and dry biomass were recorded at 64/46 kg ha-1 of N/P2O5, all showing increasing trend with increasing NP. The highest grain and straw yield and net farm benefit were recorded at interaction of 64/46 N/P2O5 kg ha-1 and 7.5 tons ha-1 of compost. Generally, the study suggested that, the use full dose of nationally blanket recommended NP rate (64/48 kg of N/ P2O5) with 7.5 tons ha-1 of compost is likely combination to attain the optimum grain yield and profit and can be alternative approach for integrated soil fertility management measure instead of the sole application of inorganic fertilizers.