Field experiments were carried out from 2005-06 to 2006-07 at Lakhaoti, Bulandshahr (U.P.) to evaluate the performance of intercropping system with phosphorus fertilization and bio-fertilizer application.  The pigeonpea equivalent yield of 1.45t/ha and 1.75 t/ha was recorded in intercropping system over sole pigeonpea (1.24 and 1.48 t/ha) during 2005-06 and 2006-07, respectively. The intercropping of mungbean in pigeonpea gave an additional grain yield of mungbean 0.24 and 0.26 t/ha, whereas, pigeonpea also produced similar yield (1.19 and 1.44 t/ha) in combination during 2005 and 2006 respectively, which resulted in  higher pigeonpea equivalent yield over sole crops of both pigeonpea and mungbean. Application of 40 and 80 kg P2O5/ha and inoculation of Rhizobium and Rhizobium + PSB did not affect the yields of both the crops significantly. Application of 40  and 80 kg P2O5/ha being at par recorded significantly higher  nutrient uptake (N and P2O5) over no phosphorus in both the crops.  Seed inoculation with Rhizobium + PSB recorded significantly higher nutrient uptake (N and P2O5) over Rhizobium alone and un-inoculation in both the crops. Pigeonpea + mungbean intercropping system fetched significantly higher net returns (Rs. 19,034 and 23,249/ha) and B: C ratio (2.40 and 2.81)  over sole pigeonpea and mungbean during the respective years. The lowest B:C ratio were observed with sole mungbean (1.16 and 1.15) followed by sole pigeonpea (2.13 and 2.55)  in the year 2005 and 2006 respectively. Net returns of Rs. 16586 and 19703 were recorded  with 40 kg P2O5/ha, whereas, Rs. 16586 and 19703 was observed with 80 kg P2O5/ha. Rhizobium + PSB inoculation recorded higher net returns (Rs. 17953 and 20,901) and B: C ratio (2.37 and 2.63) in both the years. The economic optimum dose of phosphorus was found lower (44.14 and 51.96 kg P2O5/ha)in intercropping system than sole pigeonpea (46.54 and 67.02 kg P2O5/ha) during the respective years as pigeonpea get some mutual cooperation from the intercropped mungbean crop.