Field experiment was conducted at Sinana, Goba and Upper Dinsho to determine effects of spacing on the yield and yield related parameters of potato varieties. The treatments of the experiment were three levels of spacing between plants (30 cm, 35 cm and 40 cm), three levels of spacing between rows (75 cm, 85 cm and 95 cm) and two varieties (Ararsa and Gudane). There were a total of 18 treatments. Each treatment replicates three times. The experiment was laid down with randomized complete block design (RCBD). Plant growth parameters such as plant height, number of stem per plant, number of hill per plot and yield related parameters such as number of tuber per hill, number of marketable tuber per plot, number of unmarketable tuber per plot, weight of marketable tuber per plot and weight of unmarketable tuber per plot was collected. Additionally, total tuber yield per plot was also recorded. All recorded data were inserted to GenStat computer software, and analyzed to determine the effects of treatments on selected parameters. Accordingly, potato growth parameters such as plant height, number of stem per hill are significantly (p<0.05) affected by variety and location. Plant height significantly affected by the interaction effects of spacing between plants with location and variety. All yield component parameters except number of tuber per hill significantly affected by spacing between plants and rows as well as their interaction with other factors. Consequently, the highest number of hill per plot (12.76), the highest number of marketable tuber per plot (71.3), the lowest weight of unmarketable tuber (760.2 g.) was recorded in response to 30 cm spacing between plants. On the other hand, the maximum number of hill per plot (13.8), the highest number of marketable tuber per plot (70.63), the maximum mean weight of marketable tuber (8660 g.), the highest number of unmarketable tuber per plot (40.5) and the maximum mean weight of unmarketable tuber per plot (1080 g.) was recorded from plots established using 75 cm spacing between rows. The highest tuber yield was obtained in response to 30 cm spacing between plants and 75 cm spacing between rows. The result of analysis showed different ways of response of parameters to factors. Gudane variety gives the highest weight of marketable tuber per plot and the highest tuber yield in response to 40 cm x 75 cm spacing between plants and rows. However, Ararsa variety gives the maximum number of tuber per hill, maximum marketable tuber, the highest weight of marketable tuber, the lowest weight of unmarketable tuber and the highest tuber yield at 30 cm x 75 cm spacing between plants and rows. Therefore, Potato producing farmers are recommended to use 40 cm x 75cm, 30 cm x 75 cm spacing between plants and rows for Gudane and Ararsa varieties, respectively.