An attempt has been made in this study (1) to estimate the costs and returns structure in the production of rapeseed and mustard (2) to ascertain the gaps in productivity of rapeseed and mustard at various levels i.e. at actual farm, state and district levels and and (3)to identify the constraints in the production of rapeseed and mustard and suggest measures for improving production and productivity of rapeseed and mustard in Bathinda district of Punjab. Primary data during 2015–16 were collected from 80 farmers comprised of 27 small, 47 medium and 6 large farmers from four villages of Talwandi Sabo and Sangat blocks of Bathinda district. The total fixed costs per acre were estimated to be Rs.7277.90, Rs.7312.94 and Rs.4974.27 while per acre total variable costs came out to be Rs.7612.87, Rs.7311.01 and Rs.7138.11 respectively on the small, medium and large farms. The returns over variable costs were found highest on large farms (Rs.15545.05) as compared to medium (Rs.12951.18) and small (Rs.11908.51) farms. Total cost per quintal of output was estimated to be the lowest on the large farms(Rs.2053.66) which might be due to operation of economies of scale. The per cent profit margin was estimated to be 23.72, 27.82 and 46.60 per cent on small, medium and large farms respectively. The results of productivity analysis showed that at overall the actual yield was found less than the yield of PAU recommended variety (PBR 357) by 3.50 quintal per acre. This gap could be narrowed down by making available better quality farm inputs, control of pesticides and insecticides, weed control and disease management. High cost of inputs, shortage of labour, non-availability of quality inputs particularly plant protection chemicals, incidence of pests and diseases were important production constraints and overcoming these constraints is critical for improving production and productivity of rapeseed and mustard in the district. Major avenues for future increase in rapeseed and mustard production are expected to come from enhancement in productivity of this crop. A combination of high yielding varieties and hybrids and efficient crop management needs to be adopted.