Garlic is one of the most important cash crops cultivated by smallholder farmers throughout Ethiopia. However, due to inappropriate agronomic practices including clove size and intra-row spacing, the productivity of the crop is low in the country. Therefore, a field experiment was conducted during the 2019 main cropping season under rain feed conditions to identify the optimum clove size and intra-row spacing for the economical production of garlic in Lay Gayint district, Northwestern Ethiopia. Local garlic cultivar obtained from farmers was used as a test crop. A factorial combination of three clove sizes and four intra-row spacings was used in a randomized complete block design with three replications. The results revealed that the main as well as the interaction effects of clove size and intra-row spacing influenced most of the tested growth and yield parameters of garlic. The longest plant height (73.77 cm) was recorded from garlic plants grown at 5 cm intra-row spacing, while the shortest plant height (66.98 cm) was from plants grown at 12.5 cm. The treatment combination of large-sized clove and 12.5 cm intra-row spacing recorded the longest leaf length (61.07 cm), the highest leaf number (7.79), bulb diameter (4.98 cm), bulb weight (33.83 g), and clove weight (2.71 g) of garlic. However, the treatment combination of large-sized cloves and 7.5 cm intra-row spacing produced the highest marketable (13.44 t ha−1) bulb yield. Based on the partial budget analysis, however, medium-sized cloves (1.5–1.99 g) planted at 10 cm intra-row spacing recorded the highest net benefit (723,205 Eth-Birr ha−1) with an acceptable marginal rate of return (3277.3%). Therefore, growing garlic using medium-sized cloves (1.5–1.99 g) at 10 cm intra-row spacing is recommended for economical production of garlic by smallholder farmers in the study area and areas with similar agroecology.