Onion is one of the most important vegetable crops produced in Ethiopia. Among different varieties ‘Bombey Red'' is the most widely used as a cash crop by the farmers in the rift valley areas of Ethiopia. Onion is heavy feeder and requires more fertilizer than other vegetable crops. A field experiment was conducted at Melkassa. The study consists of 5 levels of N (0, 46, 92, 138 and 184 kg N ha-1) and 3 levels of phosphorus (0, 46 and 92 kg P2O5 ha-1). The experiment was conducted in 5 × 3 factorial arrangements in a randomized complete block design with three replications. The findings highlighted that the performance of onion at Melkassa area can be enhanced through application of N and P fertilizers. In this study, the optimum dry bulb yield (34.59t/ha) was achieved using 46 kg/ha of N and P. However, according to the partial budget analysis; the highest economic benefits are obtained at 138 kg N/ha and 92 kg P2O5/ha. These can be recommended for use by the onion investor or farmers with high initial capital farmers in the study area. Nevertheless, more research is needed in different locations and on different soils.