The study was conducted to investigate the effect of biochar on soil properties and teff yield at Koga watershed, West Gojam Zone, Amhara National Regional State, Ethiopia. Five rates of amendments including three rates of biochar (4, 8, 12 t ha-1), one rate of lime (2 t ha-1) and no amendment were combined in a factorial design with full, half and zero rates of the recommended N & P fertilizer rates. A randomized complete block design with three replications was used. Composite soil samples were taken from the experimental sites using soil auger at 0-20 cm soil depth before treatment application; and treatment based soil sampling was made after harvest. Soil pH, organic carbon, CEC, total N and available P were analyzed using standard laboratory procedures. Grain yield and biomass data were also collected and analyzed. Results of the study indicated that application of biochar increased soil pH, CEC, available P and organic carbon and significantly increased yield. Using 12 t ha-1, 8 t ha-1 biochar, and 2 t ha-1 lime rates of biochar, 2.67, 1.98 and 2.45 t ha-1, respectively teff grain yield was harvested while the lowest grain yield (1.44 t ha-1) was found from treatment with no lime or biochar. Biochar combined with NP fertilizers increased yield significantly compared to plots that received fertilizer or lime alone; suggesting that biochar improved fertilizer use efficiency.