An experiment consisting of four inoculation methods and four phosphorus levels was conducted under field condition in western Ethiopia to identify appropriate inoculation method and optimum phosphorus level which enhance nitrogen fixation attributes and yield of Clark 63K soybean. None inoculation, seed, soil and seed+soil inoculation methods were combined with 0, 20, 40 and 60 kg P ha-1 and were arranged in factorial RCBD design. The crop was assessed for nodule number, nodule volume, nodule dry weight, shoot nitrogen content, number of pod bearing branches, shoot dry matter, plant height, number of pod, pod length, number of seed per pod, above ground biomass, seed yield, hundred seed weight and harvest index. The result showed that interaction effect of the main factors significantly (p<0.05) influenced nodule volume, nodule dry weight, number of pod and shoot dry matter per plant as well as shoot nitrogen content. Inoculation method did not significantly (p>0.05) influence nodule volume, nodule dry weight, shoot dry matter and number of pod per plant as well as shoot nitrogen content when the soybean was grown without phosphorus. Seed, soil and seed+soil inoculations significantly (p<0.05) increased plant height, number of pod bearing branches per plant, pod length, number of seeds per pod, above ground biomass, seed yield over the check. Seed and seed+soil inoculations showed superiority to none inoculation and soil inoculation in plant height, shoot dry matter, number of pod per plant and seed yield. The three phosphorus levels (20, 40 and 60 kg P ha-1) resulted in significantly (p<0.05) higher nodule number, nodule volume and nodule dry weight per plant as well as shoot nitrogen content than unfertilized check in seed, soil and seed+soil inoculations. Seed, soil and seed+soil inoculations gave 26.12, 15.07 and 27.92% seed yield advantage over uninoculated check in that order. Moreover, fertilization of 20, 40 and 60 kg P ha-1 had 16.67, 42.50 and 51.20% yield advantage over unfertilized treatment. When the crop was grown without inoculation and soil inoculation, 20 kg P ha-1 was enough for the soybean to accumulate higher shoot dry matter and number of pods per plant. However, for seed and seed+soil inoculations, 40 kg P ha-1 was identified as optimum.