Soil fertility depletion is a serious problem in the highlands of Ethiopia. A field experiment was conducted for two consecutive cropping seasons (2009-2010) on farmers’ fields in Degem Wereda, North Shewa, Oromiya Regional State. The objective of this study was to evaluate the effects of crop residue, compost, inorganic fertilizer and cropping system as a component of an integrated soil fertility and plant nutrient management system on barley productivity and soil chemical properties. The treatments included eight selected combinations of organic and inorganic nutrient sources, including retention of crop residues. The design was randomized complete block with three replications. Results showed that barley yield and some yield components significantly responded to the application of different soil fertility management practices. The highest barley grain yield (2575 kg/ha) and total biomass (5185 kg/ha) were obtained from the applications of the recommended nitrogen and phosphorus (NP) fertilizer followed by 2353 and 5148 kg/ha for grain yield and total biomass, respectively, due to the applications of half doses of the recommended NP fertilizer and 3 t/ha EM-compost. The grain yield of barley consistently increased as the total biomass increased. Although the highest yields were achieved from the application of the recommended NP fertilizer rate, the other integrated soil fertility management treatments also resulted in significant yield advantages compared to the control. Yields from the applications of three treatments 1/ half the recommended rate of NP fertilizer and 3 t/ha conventional compost; 2/ retention of 30% of crop residue plus half the recommended rate of NP fertilizer and faba bean mixed intercropping; and 3/ half doses of NP fertilizer plus 3 t/ha EM-compost were almost identical. Barley grain yield showed significantly positive correlations with the total biomass (r = 0.94), spike length (r = 0.43) and number of productive tillers (r = 0.42), respectively. Partitioning of treatments into single degrees of freedom orthogonal contrasts revealed that barley grain yield, total biomass, spike length and productive tillers significantly differed due to the different soil fertility management treatments. From the results of this study, it can be concluded that application of half the recommended rate of NP fertilizer with 50% of the recommended dose of compost (3 t/ha) can be an alternative best integrated soil fertility management measure instead of only inorganic fertilizers for sustainability. The results of this experiment can be reproducible in other similar agro-ecologies and farming systems of the country.