Drought is a serious tef production constraint as most of Ethiopia’s agriculture is rain dependent with limited and erratic distribution. The present study was conducted to evaluate tef genotypes for drought tolerance under in vitro condition, and to assess the performance of the in vitro developed regenerants under greenhouse condition. The in vitro experiment was arranged in a factorial experiment using completely randomized design with three replications. Three tef genotypes including Melko (drought tolerant), Gemechis (moderately tolerant) and Pop12S2 (susceptible) and five polyethylene glycol levels (0, 0.5, 1, 1.5 and 2%) were used. Analysis of variance indicated significant differences (P≤0.05) among the genotypes as well as the different polyethylene glycol concentrations for all the measured parameters, but total shoot/culture and survival percentage was not genotype dependent. There was significant genotype by polyethylene glycol interactions on total shoot number/culture, total root number/culture, shoot length, root length and survival percentage, while no significant interaction effect was noted on callus induction efficiency, percent plant regeneration, rooting percentage and number of roots/shoot. The results showed that increasing polyethylene glycol concentration from 0% to 2% in the medium causes a gradual decrease in callus induction and plant regeneration efficiency. In most regenerants, fluctuation behavior was observed for the measured parameters. Hence, to determine the most desirable drought tolerant regenerants, ranking method was taken. Accordingly, regenerant Melko (0.5%), Melko (1.5%), and Melko (1%) gave the most desirable regenerants; thus, they could be used for crossing and further improvement of drought tolerance.