Information on the combining ability and heterotic pattern of elite inbred lines is essential to maximize their use in hybrid maize development. This study was conducted to determine combining ability and heterotic pattern of locally developed maize inbred lines for grain yield and related traits. Seventeen inbred lines (10 female inbred lines and 7 tester inbred lines) were used to generate 70 single cross hybrids using line by tester crossing scheme. The resulting 70 cross progenies plus two standard checks arranged in 8×9 alpha lattice design replicated twice were planted at three mid-altitude sub-humid testing sites in Ethiopia (Bako, Hawassa and Pawe) in 2011 main cropping season. The combined analysis of variance for yield and other related traits showed highly significant differences among genotypes, crosses, female inbred lines (General combining ability, GCA), tester inbred lines (GCA), line x tester (Specific combining ability, SCA); and the interactions of these source of variation with the environment for all traits studied except for ear aspect (EA) and grain yield (GY) in female inbred lines (GCA), EA in inbred line testers (GCA) and for days to anthesis (AD) in line x tester (SCA) x environment. The significance of both GCA (lines and testers) and SCA of LxT for AD, days to silking (DS), plant height (PH), ear height (EH), EA and GY showed that both additive and non-additive gene actions are important in controlling these traits. Furthermore, the proportion of GCA sum of squares were greater than the SCA sum of squares for AD, DS, PH, EH, and EA indicating the predominance of additive gene actions in controlling these traits. For GY, the ratio of GCA to SCA sum of squares was near to unity indicating both additive and non-additive gene actions were equally important. This study identified inbred lines that can make good cross combination for more than one trait. L1 was found to be good combiner for lower values of AD, DS, PH and EH indicating that this line could be used in improving maize for earliness and short stature. L4 was ideal parent for reducing AD and DS. L3 was found to be good combiner for GY and other related traits. In addition, lines were grouped into heterotic group A, B or AB based on SCA. Based on its per se performance and combining ability, L3 was proposed to be used as a tester in heterotic group B. This study also validated T5 remain to be used as a tester in heterotic group A. Based on the SCA of crosses, heterosis and per se performance of the parents, five best cross combinations were identified for possible release or for use as parents of three way hybrids. Further verification of the stability of the selected hybrids and the new proposed tester across more locations needs to be done.229-239