Onion is one of the most important vegetable crops grown under irrigation in Amhara Region. Application of fertilizer is an important input to increase yields of vegetables including onion where its rate mostly depends on the fertility status of the particular soil. The present study was initiated with the objective to identify the optimum rate of the newly introduced NPS fertilizer for maximum bulb yield of onion under irrigated smallholder farming system. The study was conducted in Dembyia District during the 2014/2015 irrigation season. Twelve NPS fertilizer rates were laid down on Randomized Complete Block Design (RCBD) with three replications to identify the optimum rates of NPS where maximum yield of Adama Red onion variety can be obtained. The results of the experiment revealed that most of the growth and yield parameters of onion were significantly affected by NPS fertilizer. The longest plant height (60.1 cm) was recorded when N:P 2 O 5 :S was applied at the rate of 73.5:92:16.95 kg ha -1 , respectively. The longest (51.1cm) and widest (1.44 cm) onion leaves were recorded on plants where N:P 2 O 5 :S was applied with 136.5:119.6:22 kg ha -1 . Onion plants supplied with 105:119.6:22 kg ha -1 N:P 2 O 5 :S fertilizer rate gave the highest mean bulb weight (198.8 g), marketable yield (20.8 ha -1 ) and total bulb yield (21.4 t ha -1 ). Similarly, onion plants supplied with 105:119.6:22 kg ha -1 N:P 2 O 5 :S fertilizer rate recorded the highest marginal rate of return followed by those onion plants supplied with 105: 92:16.95 kg ha -1 . Onion plants which were not supplied with NPS fertilizer showed generally lower growth and yield parameters. Application of NPS fertilizer at the rate of 105:119.6:22: kg ha -1 N:P 2 O 5 :S can be recommended for economical production of onion in the study area.