Restoring soil fertility in smallholder farming systems is essential to sustain crop production. An experiment was conducted in 2011 and 2012 to study the effect of compost and inorganic fertilizer application on soil chemical properties and wheat yield in northwest Ethiopia. Full factorial combinations of four levels of compost (0, 4, 6, 8 t ha(-1)) and three levels of inorganic fertilizers (0-0, 17.3-5, 34.5-10 kg N-P ha(-1)) were compared in a randomized complete block design with three replications. In 2012, two sets of trials were conducted: one was the repetition of the 2011 experiment on a new experimental plot and the second was a residual effect study conducted on the experimental plots of 2011. Results showed that in the year of application, applying 6 t compost ha(-1) with 34.5-10 kg N-P ha(-1) gave the highest significant grain yield. In the residual effect trial, 8 t compost ha(-1) with 34.5-10 kg N-P ha(-1) gave 271 % increase over the control. Grain protein content increased 21 and 16 % in the current and residual effect trials, respectively, when 8 t compost ha(-1) was applied; it increased 11 and 14 % in the current and residual effect trials, respectively, when 34.5-10 kg N-P ha(-1) was applied. Under the current and residual effects of 8 t compost ha(-1), SOM increased 108 and 104 %; available P 162 and 173 %; exchangeable Ca 16.7 and 17.4 %; and CEC 15.4 and 17.1 %, respectively. Applying 6 t compost ha(-1) with 34.5-10 kg N-P ha(-1) is economically profitable with 844 % MRR.
