SummaryThe global demand for dehydrated onion is on the rise, driven by the increasing consumer preference for ready‐to‐eat convenience foods. This study focused on enhancing the quality and functional properties of dehydrated onion slices (cv. Pusa Shobha) through different pre‐treatment and drying conditions. Fresh onion slices were subjected to pre‐treatment using NaCl (3%, 5% and 7%) and KMS (0.3%, 0.5% and 0.7%) solutions for 10 min, followed by tray drying at 50 °C, 60 °C and 70 °C temperatures for varying durations of 14, 12 and 10 h, respectively. Based on physicochemical and functional properties, onion slices pretreated with 5% NaCl + 0.5% KMS and dehydrated at 60 °C for 12 h retained higher bioactive compounds like total phenols (166.32 mg GAE 100 g−1 DW), total flavonoids (28.94 mg QE g−1 DW), ascorbic acid (12.45 mg 100 g−1 DW), quercetin (172.88 μg g−1 DW) and total antioxidant activity (24.59 μmol TE g−1 DW). Additionally, it maintained superior sensory acceptability with higher pungency (7.15 μmol g−1 DW), dehydration ratio (9.25%), rehydration ratio (5.20%), lower non‐enzymatic browning (0.36) and moisture content (5.75%). Hence, the optimised treatment of ‘Pusa Shobha’ slices with 5% NaCl + 0.5% KMS, followed by dehydration at 60 °C for 12 h, yields dehydrated onion slices with superior bioactive compounds, sensory acceptability, and enhanced functional properties. The findings of his research offer valuable technology for the food industry, providing a practical and efficient method to produce high‐quality dehydrated onion slices.