This paper uses firm-level panel data to study the development and determinants of technical efficiency and productivity in the textile and garment sector in Vietnam during the period 1997-2000. Applying the methodology of Battese and Coelli (1995), we find that average technical efficiency of the textile and garment sectors is relatively high, but that technical efficiency differs significantly across ownership, location, size, age, and export orientation. The most productive firms in the textile sector are old, mid-sized, private, South-based, export-oriented firms, while in the garment sector old, medium to large, private or foreign invested, South-based firms have the highest technical efficiency. In the garment sector TFP has increased over the study period, reflecting changes in technical efficiency as well as technical progress