Teff is the most strategic cereal crop grown from high rainfall to drought prone areas of Ethiopia, where it covers nearly 30% of the land allotted for cereals. However, its productivity remains very low due to lack of knowledge and research interventions. To investigate the grain yield potential, estimate the genetic parameters, and the diversity, a pot experiment with intensive management and a field experiment with conventional management at two contrasting locations for two seasons using the same 317 genotypes and additional 3 improved cultivars in the field experiment were carried out. The results showed highly significant variation among the genotypes for grain yield, biomass, harvest index, and phenological traits under both experiments. The best linear unbiased predictor (BLUP)-adjusted grain yield performance of the genotypes ranged from 4.2 to 8.8 g/plant in the intensive management and 1.8 to 4.3 g/plant in the field growing condition with conventional management. Coefficient of genetic variation, heritability, and expected genetic advance for grain yield were the highest in both experiments. Among the phenological traits, the grain filling period in the intensive growing condition exceptionally showed the highest genetic coefficient of variation and genetic advance. The high grain yield performance and wider range of the harvest index observed under the intensive management condition with moderate to high heritability signifies the genetic potential of teff for further improvement through trait recombination.