Grain production – basic branch of the Russian agro-industrial complex, - is one of the few sectors of the Russian economy that have demonstrated sustainable development over the past two decades. What were the main sources of growth in total factor productivity in Russian grain production? On the microdata of agricultural organizations in Russia with help of the data envelopment analysis (DEA) method, the article shows the changes in overall grain productivity that occurred along with the formation of market institutions due to a trade liberalization, land privatization and technical re-equipment, and has resulted in the boost of sector productivity. The fastest growth in total factor productivity occurred between 2002 and 2007 and slowed by 2016. Changes in factor use in the grain subcomplex contributed the most to total factor productivity growth across all periods. At the same time, the technological efficiency of the leading grain farms grew, that is such farms demonstrated a more efficient distribution of available resources. The high increase in total factor productivity in the grain industry in the period from 1995 to 2002 allowed the Russian Federation to enter the world grain market, becoming a key player.