A field experiment was conducted to assess plant growth, symbiotic performance and grain yield of common bean in response to rhizobial incoculation and phosphorus application at Galalicha in Southern Ethiopia during the 2012 and 2013 cropping seasons under rain-fed conditions. The treatments consisted of 2 released common bean varieties (Hawassa Dume and Ibbado), 3 levels of Rhizobium inoculation (uninoculated, inoculated with strain HB-429 or GT-9) and 4 levels of phosphorus application (0, 10, 20 and 30 kg P ha−1) using a split-split plot design with four replications. Here, phosphorus levels, Rhizobium inoculation and common bean varieties were assigned as main, sub- and sub-sub treatments, respectively. The results revealed marked varietal differences in plant growth, grain yield and symbiotic performance. Of the two common bean varieties studied, Hawassa Dume generally showed superior performance in most measured parameters in 2013. Rhizobium inoculation significantly (p ≤ 0.05) increased plant growth, symbiotic performance and grain yield. Applying Rhizobium strain HB-429 to bean crop respectively increased plant growth, %Ndfa, amount of N-fixed and grain yield by 19, 17, 54 and 48% over uninoculated control. Similarly, the application of 20 kg P ha−1 to bean plants respectively resulted in 36, 20, 96 and 143% increase in plant growth, %Ndfa, N-fixed and grain yield when compared to the control. These results clearly indicate that plant growth, symbiotic performance and grain yield of common bean can be significantly increased by Rhizobium inoculation and phosphorus fertilization in Ethiopia. Rhizobium inoculants are a cheaper source of nitrogen than chemical fertilizers and when combined with moderate phosphorus application can markedly increase grain yield for resource-poor farmers.