Abstract Increasing fuel prices, concern about climate change and future energy security have led to tremendous global interest in the use of liquid biofuels in the transport sector which, in turn, has driven large-scale land acquisitions in developing countries for biofuel feedstock production. However, regardless of the vast nature of reported land deals and widespread concern about their potential negative consequences, implementation of most of the reported biofuel land deals in Ethiopia has not yet happened. Using a case study of large-scale jatropha plantation in Ethiopia, this paper examines the main causes underpinning the disappointing agronomic performance and finally termination of large-scale jatropha plantations. Although it has been argued that jatropha can be commercially grown well on marginal land without irrigation, this study indicates that moisture stress was the key factor in the failure of many large-scale jatropha plantations in Ethiopia. Furthermore, the use of untested planting material and conflict with local communities over the land were other important factors that contributed to termination of jatropha projects.