Tef [Eragrostis tef (Zucc.) Trotter] is an indigenous Ethiopian cereal which helps provide healthy and nutritious diets for people and a palatable straw for livestock feed. This study was conducted to determine the variation in grain-straw yield and straw quality traits of 35 tef varieties and a local check grown in two locations for two years. Straw crude protein (CP), in vitro organic matter digestibility (IVOMD), metabolizable energy (ME) and the yields of grain (GY) and straw (STY) were significantly (P < 0.01) affected by variety, environment and their interactions. GY, CP, ME and IVOMD were significantly higher in the Debre Zeit site compared to Holetta and, except for GY, in 2016 compared to 2015. About 150% and 25% higher mean CP content was recorded in Debre Zeit than in Holetta, and in 2016 than 2015, respectively. Positive and significant (P<0.01) associations were observed between GY and STY, among CP, ME and IVOMD, and among NDF, ADF and ADL. Among all studied varieties, Melko produced the highest grain-straw yield and best fodder quality traits. Based on the yields and qualities of both grain and straw, the production of Gimbichu, Quncho and Gola varieties conferred more than 40% economic advantage over the local check in the local markets. Our study generally identified varieties with high grain-straw yield and/or straw quality traits which provided economic advantages for tef production and an opportunity for future utilization in tef improvement programs.