The potato psyllid, Bactericera cockerelli (šulc), has been detrimental to potato, tomato, and other solanaceous crop production in many countries. Management of B. cockerelli is dominated by frequent insecticide applications, but other approaches need consideration, including biological control. The sole arrhenotokous ectoparasitoid of nymphal potato psyllids is Tamarixia triozae (Burks) (Hymenoptera: Eulophidae). Here, laboratory evaluations of host stage preference, parasitoid mutual interference, and functional response of T. triozae were conducted with varying host B. cockerelli nymphal stages and densities on both tomato and bell pepper plant leaves. Significant differences in prey stage preferences were found on both host plants. In a no-choice host stage test, significantly greater parasitism of fourth- and fifth-instar B. cockerelli nymphs occurred, and no parasitism of first or second instars was found. Similar preferences were found in a host stage choice test. Effect of mutual interference on per capita female parasitism was significant when confining two or three simultaneously ovipositing female T. triozae adults on a given host density versus solitary females. The per capita search efficiency (s) of female T. triozae was significantly and negatively correlated with T. triozae density. The functional response of T. triozae to nymphal B. cockerelli was a Type III form on both host plants. In addition, host plant type did not exert a significant bottom-up effect on either parasitism or functional response of female T. triozae. The feasibility of using bell pepper as a potential banker plant for T. triozae augmentation is also discussed.