In Ethiopia, agricultural transformation is taken as a pathway to transition from a traditional subsistence orientation to one that is market focused and commercialized. In this regard, efforts to enhance smallholders' participation in cereal market in general and wheat in particular, through surplus production have been made, but there is dearth of information on the status of market participation and its determinant factors particularly in Adola Rede district. This study was aimed at analyzing market participation of smallholder wheat farmers in Adola Rede district. Two stage sampling technique was employed to select a sample of 150 for analysis. To identify factors affecting market participation decisions and level of market participation, Heckman two step estimation procedures was used. The study shows that, households in the study area sold 39% of their wheat to the market. Perception on lagged wheat price, quantity of wheat produced, size of land allocated for wheat and literacy status of household head had significant positive effect on market participation decision, while age of household head had significant negative effect. Level of market participation affected positively and significantly by perception on lagged wheat price, size of land allocated for wheat, quantity of wheat produced, and literacy status of household head. The study result suggests that, provision of training for households on contract farming, increasing of productivity and production of wheat, improving land efficiency, strengthening of farmers' education through adult education as a means to enhance wheat market participation and level of participation of smallholders.