A field experiment was conducted to know the effect of In situ green manl,lring and nitrogen levels on hybrid cotton (DHH-11) under transitional tract of Dharwad at Main Agricultural Research Station,. University of Agricultural Sciences, Dharwad under rainfed condition on black clay loam soil during 2002. There were 12 treatment combinations comprising of four green manuring crops as intercrops in hybrid cotton (Lucerne, Sunnhemp, Dhiancha and Horsegram) and three nitrogen levels (100%,75% and 50% recommended dose of nitrogen (RDN)) with a control treatment (sole cotton with recommended dose of fertilizer (RDF) alone). Lucerne green manuring recorded significantly higher seed cotton yield (1549 kgjha) over all other green manuring crops. Application of 100 per cent RDN recorded significantly higher seed cotton yield (1535 kg/ha) over 75 per cent (1343 kg/ha) and 50 per cent RDN (1225 kg / ha). Lucerne green manuring with 100 per cent RDN recorded significantly higher seed cotton yield (1869 kg/ha) and  maximum net returns of Rs. 22,361/ha and a B:C ratio of 2.37.