Declining soil fertility is a major constraint to wheat production in the Ethiopian highlands, yet sufficient evidence on the combined effect of organic and inorganic nutrient sources on both soil fertility and wheat productivity remains limited under local conditions. Therefore, this study evaluated the effects of integrated application of vermicompost (VC) and nitrogen-phosphorus (N/P₂O₅) fertilizers on soil physicochemical properties and bread wheat productivity on Nitisols in Yilmana Densa district, Northwestern Ethiopia, during the 2025 main cropping season. A randomized complete block design with three replications was used in a 4 × 4 factorial arrangement of four VC rates (0, 3, 6, and 9 t ha^− 1) and four N/P₂O₅ fertilizer levels (0/0, 46/46, 92/69, and 138/92 N/P₂O₅ kg ha^− 1). Vermicompost significantly (p ≤ 0.05) improved soil pH, organic carbon, total nitrogen, available phosphorus, cation exchange capacity, and total porosity while reducing bulk density. Integrated VC and NP application also enhanced wheat growth, biomass, and grain yield at both experimental sites. The highest grain yields (5.0 and 5.6 t ha^− 1) were obtained from 9 t VC ha^− 1 plus 138/92 N/P₂O₅ kg ha^− 1 at the two sites, respectively. This treatment achieved the highest net benefit of 306,208.5 Ethiopian Birr ha^− 1 at Site 1 and 348,833.5 Ethiopian Birr ha^− 1 at Site 2. Overall, integrated VC and N/P₂O₅ fertilization improved soil properties and wheat productivity under the conditions of this one-season study. Further multi-season and multi-location research is needed to assess the consistency, residual effect, and economic feasibility of these practices.