Many participatory research works in Ethiopia and elsewhere proved that peasant farmers can classify soils according to their fertility/productivity status but these studies did not use this knowledge for developing practically applicable site-specific fertilizer rate recommendations. Experiment comprising factorial combinations of four levels of nitrogen (N) (0, 60, 120, and 180 kg ha(-1)) and two contrasting malt barley varieties (V-1= Miscal-21 versus V-2= Holker) was conducted on 10 sites representing soils of less fertility/less productivity (S-1) and fertile/productive (S-2) according to farmers' classification in 2010-2012. The objectives were to confirm and use farmers' knowledge for developing practically applicable site specific N fertilizer rate recommendations; and generate information for developing malt barley varieties with lower grain protein accumulation and higher productivity in higher N application rates. The results revealed that farmers knowledge could be used to develop practically applicable site-specific fertilizer rate recommendations. Therefore, applications of 110.5, 45.0, 137.5 and 110.5 kg N ha(-1)in S1V1, S2V1, S(1)V(2)and S2V2, respectively, are suggested for production of malt barley having 11.85% dry grain protein content with the relative higher productivity in the highlands of Ethiopia. Results also revealed that there is opportunity to develop malt barley varieties with lower grain N accumulation and higher productivity in higher N rates.