A study of Genotpe x Environment Interaction (GEI) and yield stability in soybean [Glycine max (L.) Merrill] was conducted with 20 genotypes evaluated over six environments in Ethiopia in the year 2007. The objectives of the experiment were to determine the magnitude of GEI, analyze the stability of soybean genotypes and thereby identify widely and/or specifically adapted genotypes. There were highly significant (p<=0.01) environment, genotype and GEI effects with the environment and GEI components accounted for the major portion (86.8%) of the total sum of squares. According to the additive main effect and multiplicative interaction (AMMI) model, four genotypes, two high yielding, AGS-115-1, IPB-144-81(p), and two medium yielding, Braxton and Awassa-95, were identified as stable genotypes. The other two high yielding genotypes, TGX-297-6f-1 and AGS-162 were found to be unstable and can be recommended for narrow adaptation to Areka and Inseno, respectively. The environment at Gofa best discriminated among the genotypes and produced the best average yield. On the other hand, the environments at Areka and Awassa 2 (late planting) were unsuitable environments for soybean production.