Recombinant inbred lines (RILs) of the tef cross Kaye Murri × Fesho were evaluated for nine quantitative traits at three locations in the central highlands of Ethiopia during the 1998/99 main season in order to estimate the genetic coefficient of variation (GCV), heritability and genetic advance expected from selection. Highly significant differences were obtained among the RILs for all traits studied. Grain yield, panicle weight and yield per panicle showed a relatively high GCV (12–16%). A comparatively high heritability was obtained from days to heading (31%) followed by panicle length (25%) and grain yield (23%). Moderate amounts of heritability values were obtained for panicle weight and yield per panicle. High genetic advance as percent of the mean were obtained from grain yield (16%), yield per panicle (12%) and panicle weight (10%) at5% selection intensity, which indicated the possibility of improving these traits. Several RILs were identified that have exceeded the better yielding parent at all locations. Grain yield showed a strong positive association (r = 0.26–0.70) with shoot biomass, lodging index, panicle length, plant height, panicle weight and yield per panicle. Overall, the present results showed a) the availability of genetic variance for some useful traits in the RILs for exploitation through selection, b) the existence of significant genotype × location interaction that indicated the need to test inbred populations in more environments, and c)the availability of superior inbred lines for further breeding work.