Food and nutrition security is not only addressed by increasing production alone, it should also ensure by reducing food loss. Onion has a great contribution to both economic and health issues, however, its production and productivity in the country is low. Thus, the study was initiated to identify multiple constraints on onion production and postharvest handling practices and to determine the extent of postharvest loss along the supply chain in northwestern Ethiopia. The survey was conducted on production, marketing, and consumption at farm, wholesale, retailer, and consumers level. The multistage sampling procedure was employed. The present results revealed that sex, age, educational level, production experience, land covered by onion, and household size has a significant influence on onion production. Sex, age, education level, active household size, selling experience, amount purchased, and storage duration have a significant association with onion production and postharvest loss. Major onion production and post-harvest loss constraints were high perishability, nature of the crop, market, linkage problem and low market price, lack of awareness of using post-harvest technologies, absence of better storable varieties, shortage of fertilizer access, disease and insect pests. The whole purchased produce never reached the consumer's hands. The total postharvest loss of onion at the farmer, wholesale, retail, and consumer level was found to be 29.775%, of which the higher proportion of losses (35.5%) was observed at the farmer's level. Based on the findings of the present study, onion producers were challenged by timely and adequate supplies and unfair, high cost of major production inputs, and high post-harvest loss. Therefore, producers and handlers in each supply chain need to be trained on affordable and applicable postharvest technologies. In addition, continuous capacity-building training, improving infrastructures, and input access along the supply chain should be designed and implemented to improve better crop management and postharvest handling practices. Moreover, marketing cooperatives working on onion postharvest handling and marketing systems should be functional to absorb surplus production and ensure continuous supply to the market. Thus, meaningful interventions in the development and implementation of policy on sustainable production, handling practices, and supply of onion should be designed.