Abstract The main purpose of this research is to examine the effectiveness of Student Evaluation of Teaching (SET) from a sample of university teachers’ and students’ view. The study adopts exploratory descriptive design. Participants of this research were 300 teachers and 600 graduate students from 3 Iranian higher education institutions. A 30-item format questionnaire was the main instrument for data collection. Responses to the items were made on a five-point Likert scale anchored with strongly agree and strongly disagree. Results show that Cronbach alfa coefficients of measures are in satisfactory level (.86 for teachers’ version and .88 for students’ version). There are statistically significant differences among teachers and students based on gender, teaching experience, tenure and major. The teachers highly agreed with using different evaluation methods (e.g., peers evaluation, self-evaluation, and administrators) instead of merely relay on Student evaluation of teaching method. The study presents a challenge to the use of SET in higher education system in Iran and, in particular, raises questions about fairness if such ratings are to be used in decisions relating to employment issues. The findings suggest that SET should be applied cautiously in faculty performance evaluation.