A field experiment was conducted during the summerseason of 2000-2001 at IARI, New Delhi using the onion cultivar Pusa Madhvi to identify a suitable Azotobacter strain and nitrogen level combination(s) for better yield and quality of onion. The treatments consisted of factorial combinations of four levels of nitrogen (0, 25, 50 and 75% recommended doses) and three Azotobacter strains (CBD-15, AS-4 and M-4) with two uninoculated controls, one with the full dose of N and the other without NPK. The results revealed that the application of 75% recommended N dose along with inoculation with CBD-15 or M-4 significantly increased the marketable yield and the nitrogen content in both leaves and bulbs, over the control with the full dose of nitrogen, whereas only 75% recommended N + CBD-15 led to a significantly increased total yield. Total soluble solids (TSS) and neck thickness were significantly reduced by the application of 50% recommended N dose along with inoculation with CBD-15 or M-4 compared with the uninoculated control with the full N dose. Inoculation with any of the Azotobacter strains along with 50 or 75% recommended N dose significantly reduced the sprouting loss during storage, while inoculation significantly reduced rotting and total losses when combined with 50 or 25% recommended N doses.