The study was undertaken to examined the production efficiency of yam producers in Iseyin Local Government Area of Oyo State, Nigeria. Specifically the study described the socio-economic characteristics of yam producers; estimate the technical efficiency level of yam production; determine the profitability status of yam production and identify the major problems associated with yam production in the study area. Primary data were collected from ninety (90) yam farmers. Descriptive statistics, stochastic production frontier function and profitability (gross margin) analysis, were used as analytical tools. The empirical results indicated that area cultivated with yam, planting materials and fertilizer were the major factors that influenced changes in yam output. Farmer-specific demographic variables such as age, marital status, household size, education level and farming experience were found to have significant effects on the observed variation in technical efficiency among the yam producers. The technical efficiency of farmers varied from 0.058 to 1.00 with a mean of 0.718. The implication of the study is that efficiency in yam production among the farmers could be increased by 28.2% through better use of land, planting materials and fertilizer in the short term given the prevailing state of technology. The cost and returns analysis showed that yam production was profitable in the study area with the average income of N2, 564,666.67 and a mean gross margin of about N1, 539, 914.21 with the income expenditure ratio of 2.5. The result suggests that farmers could increase output through more intensive and efficient use of available resources (land, planting material and fertilizers) given the current state of technology. Farmers should be encouraged to keep records also, they should be taught the recommended quantities of agrochemicals and improved seed to use on their farms in order to achieve optimum yield. This will help the farmers to make better farm plans in the future so as to increase output as well as profit.