Abstract: Based on the agricultural household on-the-spot investigation data collected in the “One River and Two Tributaries” Region of Tibet, we estimated the technical efficiency of grass production of agricultural households using the stochastic frontier production function. This method estimates the contributions of grass family differences, farm size, and region distribution to the technical efficiency of grass production. The results indicated that there is a loss of technical efficiency in grass production in the “One River and Two Tributaries” Region of Tibet. The yield per mu could increase by approximately 30% with improved technical efficiency. The output elasticity coefficients with respect to input factors of labor, seeds, fuel, organic fertilizer, chemical fertilizer, and land were 0.1423, 0.2197, 0.1309, 0.2600, 0.2265, and 0.0206, respectively. Grass family difference was identified as the key factor in improving technical efficiency. Farm size and liquidity strongly affected the technical efficiency of grass production via their effects on other input factors such as labor and capital. This was because of the disadvantageous position of resource use, compared with animal husbandry and off-farm industries. Human capital and agricultural comprehensive production capability did not affect the technical efficiency of grass production. Increasing the grass yield by improving technical efficiency can include measures such as extending the production technology to legume forage grasses, enlarging grass planting areas, and identifying which grass families are best adapted for growth in different regions, especially Lhasa.