Resource use efficiency of yam production among smallholder farmers in Southeast, Nigeria was studied. The specific objectives of the study are to estimate the costs and returns in yam production, determine the allocative efficiency of yam production among small holder farmers, determine the different effects of yam cropping activities to the environment and identify and describe the limiting factor to yam production in the study area. A multi-stage random sampling technique was used to select 240 farmers and from which information needed for the study were elicited using a structure questionnaire. Cost and returns analysis, allocative efficiency model and distributive statistics such as percentage response and frequency distribution table were used to capture the objectives of the study. The result shows that yam production was profitable in the study area. Also, result of the allocative efficiency of the inputs shows that the farmers did not attain optimal allocative efficiency, since they either under - utilized or over utilized their resources. Yam production activities in form of clearing, burning, pesticides use, fertilizer use and tillage could result in among others wild Life habitation, oxygen – carbon dioxide balance, erosion, effect aesthetic, increases soil temperature, reduction of soil nutrient, human health and welfare and conversion of organic nitrogen into mobile nitrates. The constraints to yam production were high cost of labour, poor access to credit, poor access to extension services and high cost of labour. Improving farmers’ access to credit, fertilizer and extension contact were recommended.