A field investigation was carried out during rabi, 2007-08 to study the influence of planting methods and nutrient levels on growth and yield of chilli (cv. Byadagi kaddi). The results revealed that dry fruit yield (16.18 q ha-1), dry fruit weight per plant (85.96 g), 100 dry fruit weight (70.45 g), fruit length (10.35 cm), fruit girth (0.80 cm), stem girth (1.01 cm), total dry matter (TDM) production (71.40 g plant-1), leaf area index (LAI) 1.21, number of  leaves (251.20) and number of  branches per plant (25.97) and plant height (91.26 cm) of chilli was significantly higher with the application of  300:150:150 kg N, P2O5 and K2O ha-1 over other nutrient levels. Transplanting two seedlings per hill recorded significantly higher dry fruit yield (17.96 q ha-1) than the other planting methods.  Application of 150:75:75 kg N, P2O5 and K2O ha-1 to drill sown chilli @ 5.0 kg seed rate per hectare recorded higher net returns (Rs. 46,688  ha-1) and B:C ratio (3.13) over other treatment combinations.