Potato is an important cash crop of Himachal Pradesh. Although, potato production in the state is very less, it fetches higher price than potato from plain areas due to its off seasonality. The study of potato marketing in hilly region is necessary to find out the share of profit made by farmers and other intermediaries in the marketing channel. Therefore, current study was attempted to find out marketing cost, margins, price spread and marketing efficiency of potato produced in Shimla hills. The interview schedule was used to collect primary data from 40 potato growers from Shimla and wholesalers as well as retailers from Chandigarh market. The collected data were analyzed by using suitable tools of statistics and economic measures. The findings indicated that majority of potato was sold to wholesalers at Chandigarh market through commission agent. The marketed surplus of potato was nearly 80 per cent of total produce and 15 per cent was retained by farmers for seed purpose. The average cost of marketing of 1 quintal of potato was found to be one fourth of consumer price. More than half of total marketing cost was borne by the farmer. The producers share in consumer rupees was found to be 66 per cent. The marketing efficiency was estimated to be 1.95 by Acharya and Agrawal method. Higher transportation cost and shortage of labour for post-harvest operation were major constraints. In order to reduce marketing cost borne by farmers, cooperative marketing should be initiated in Shimla hills. Farmers need to be grouped as Farmer Producer Society (FPOs) to increase their share in consumer rupees.