Onion (Allium cepa L.) is an important cash crop for smallholder farmers in the Central Rift Valley of Ethiopia. However, its productivity is low, owing to a number of factors including inappropriate irrigation water and nitrogen management. A field experiment was, therefore, conducted at Amibara farm, Arba Minch, Ethiopia, during the 2018/19 dry season to determine the effect of the irrigation interval and nitrogen rate on growth, yield, and yield components of onion (Bombay Red variety). The treatments comprised four irrigation intervals (3, 6, 9, and 12 days of crop water requirement, ETc) and four nitrogen levels (0, 50, 100, and 150 kg·N·ha−1). The experiment was laid out in a split-plot design using irrigation intervals as main plots and nitrogen rates as subplots with three replications. The growth parameters, yield components, and final yield of onion were significantly higher with 3 and 6 days irrigation intervals (which were statistically similar) than 9 and 12 days irrigation intervals. The increasing N rate significantly increased the growth and yield components up to 150 kg·N·ha−1, but the response was significant only up to 100 kg·N·ha−1 on the final yield of the crop. The growth and yield contributing parameters, showing enhancement with frequent irrigation and higher N rates, had a significant bearing on the final yield of onion. The irrigation at 6 days interval combined with 100 kg·N·ha−1 gave a higher marketable yield (30.21 t·ha−1), net return (Birr 288,458 ha−1), and marginal rate of return (8586%). As such, irrigation at an interval of 6 days and fertilizer N at the rate of 100·kg·ha−1 may be recommended for higher productivity and profitability of onion at Arba Minch, Gamo Zone, southern Ethiopia.