Fertilizer demand analysis of wheat and teff grown in Vertisols of Ada and Lume, Ethiopia, was carried out to assess the factors that determine demand for fertilizers. Preliminary results revealed that family size, income, distance, price, oxen and yield tended to be important factors influencing fertilizer use in Ada. The same analysis indicated that in the Lume area, availability of rainfall, timely delivery of fertilizer, farm sizes and income but not price were significant determinants of the level of demand for fertilizer. Diammonium phosphate (DAP) was found to be the most widespread fertilizer for all the crops grown on Vertisols of the region. In all cases sub-optimal use of fertilizer was being practiced with different methods of application, both deviating from the recommended rates and practices. Only a few farmers were applying the recommended rate for teff and wheat. During fertilizer shortage, crop rotation was being practiced to maintain soil fertility. Some policy issues relevant to the use of fertilizer were also considered in the study.