The study aimed to determine the best nitrogen and phosphorus fertilizer levels for NERICA-3 rice in Ethiopia. Different fertilizer rates were tested, and the results showed that nitrogen had a significant impact on various growth and yield attributes, while phosphorus mainly affected crude fiber content. The highest rice grain yield was achieved with 92 kg of nitrogen per hectare, with a decrease in yield at higher levels. Sensitivity analysis indicated that 92 kg of nitrogen and 23 kg of phosphorus per hectare provided the highest marginal rate of return. Overall, proper nitrogen and phosphorus application can significantly improve rice yield and quality in rain-fed conditions in Ethiopia.