Production of many crops, including onion, under salinity is lagging due to limited information on the physiological, biochemical and molecular mechanisms of salt stress tolerance in plants. Hence, the present study was conducted to identify salt-tolerant onion genotypes based on physiological and biochemical mechanisms associated with their differential responses. Thirty-six accessions were evaluated under control and salt stress conditions, and based on growth and bulb yield. Results revealed that plant height (6.07%), number of leaves per plant (3.07%), bulb diameter (11.38%), bulb yield per plant (31.24%), and total soluble solids (8.34%) were reduced significantly compared to control. Based on percent bulb yield reduction, seven varieties were classified as salt tolerant (with <20% yield reduction), seven as salt-sensitive (with >40% yield reduction) and the remaining as moderately tolerant (with 20 to 40% yield reduction). Finally, seven salt-tolerant and seven salt-sensitive accessions were selected for detailed study of their physiological and biochemical traits and their differential responses under salinity. High relative water content (RWC), membrane stability index (MSI), proline content (PRO), and better antioxidants such as super oxide dismutase (SOD), peroxidase (POX), catalase (CAT), and ascorbate peroxidase (APX) were observed in tolerant accessions, viz. POS35, NHRDF Red (L-28), GWO 1, POS36, NHRDF Red-4 (L-744), POS37, and POS38. Conversely, increased malondialdehyde (MDA) and hydrogen peroxide (H2O2) content, reduced activity of antioxidants, more membrane injury, and high Na+/K+ ratio were observed in sensitive accessions, viz. ALR, GJWO 3, Kalyanpur Red Round, NHRDF Red-3 (L-652), Agrifound White, and NHRDF (L-920). Stepwise regression analysis identified bulb diameter), plant height, APX, stomatal conductance (gS), POX, CAT, MDA, MSI, and bulb Na+/K+ ratio as predictor traits accounting for maximum variation in bulb yield under salinity. The identified seven salt-tolerant varieties can be used in future onion breeding programs for developing tolerant genotypes for salt-prone areas.