Tanzania Journal of Agricultural Sciences (2017) Vol. 16 No. 1, 17-24Surveys were conducted in farmers’ fields in the northern and southern highlands of Tanzania to determine the distribution of wheat stem rust disease caused by Puccinia graminis f. sp. tritici and response of farmer selected wheat varieties to the disease under their natural habitat. Regions surveyed in the northern zone included Manyara, Arusha and Kilimanjaro, while in the southern highlands; the survey was carried out in Iringa, Njombe and Mbeya. Four quadrants from every corner of the surveyed field and one from the center, 1 m2 each were used to assess rust disease incidence (%) by counting the infected plants divided by total plants per quadrant times one hundred. Rust disease severity was assessed by using a 0-9 scale: 0=healthy plants, 1=1-10% stem area with rust pustules, 3=11-25% stem area with rust pustules, 5=26-50% stem area with rust pustules, 7=51-75% stem area with rust pustules, 9=>75% stem area with rust pustules. Both rust disease incidence and severity was log transformed before analysis of variance. A total of 17 wheat fields were found infected, 10 from the northern zone and 7 from the southern highlands. In the northern zone, 50% of the fields had disease incidence above 40% (P>0.05). In the southern highlands, varieties Sifa and Juhudi were tolerant with disease incidence of 10% in Mbeya and Njombe respectively. However, the disease incidence of 90% was recorded in Mbeya region on the same Juhudi variety. Generally, the mean disease incidence recorded were 33.5% and 35.7% from northern and southern highland zones respectively. Njombe with the same variety Juhudi had 10%, rust disease incidence, indicating presence of a variant of Puccinia graminis f. sp. tritici with higher virulence. The best performing variety in Mbeya was found to be Sifa whose fields had an incidence of 10%. In the northern zone the disease incidence in Manyara, Kilimanjaro and Arusha ranged from 20-60 % with the susceptible variety Mbayuwayu being preferred by most farmers instead of the variety Ngamia grown in Manyara with incidence of 10% (P>0.05). The most tolerant or resistant varieties were Ngamia and Sifa grown in northern and southern highlands zones respectively. There was a distinct difference in disease severity between the two agro-ecological zones with more severity being observed in the northern zone. Disease severity was mostly proportional to disease incidence. The study revealed wheat stem rust potential hotspots, resistant varieties and provides background information for future research and development of management strategies of wheat stem rust disease.