Potato is a high potential food security crop in Ethiopia due to its high yield potential and nutritional quality tuber, short growing period, and wider adaptability. Arsi administrative province is one of the potential potato growing areas in southern parts of Ethiopia. The potato is grown there as a field crop, and it substantially supplies potatoes to the whole country. Despite the suitability of this area for high quantity and quality potato production in the country, there are several constraints, which drastically affect to the low production and productivity of potato crop by smallholder farmers. The objective of this study was to evaluate the potato seed system, storage, pre-planting treatment practices applied and marketing systems followed by potato producing farmers and to suggest improvement options. In this research, a combination of literature study, expert elicitation, group discussion, field observation, and questionnaire base survey were used. The result of this study showed that a number of factors constraining the system including: unavailability of high quality seed tubers, unavailability of improved varieties, unavailability of improved storage structure, low price of the produce and poor transportation. It is concluded that availability of improved potato varieties, improved storage facilities, use of pesticides and better marketing opportunities are crucial to improve the potato crop system, to alleviate poverty and improve food security of smallholder armers in the Arsi area in particular and in the country in general.