This paper examines the efficiency of applied N, P, and K fertilizers under tropical conditions. To meet their food demands, tropical countries are importing large quantities of fertilizers at an enormous cost. There is a need for improving crop yields at a reduced cost and a better understanding of the factors that contribute to the overall efficiency of applied fertilizers. It is estimated that under tropical condition, the efficiency of applied N is less than 50%, less than 10% for P and for K it is somewhere around 40%. Losses of N are mainly due to leaching, runoff and volatile losses of ammonia. Under flooding and in alternate wetting and drying conditions of rice lands and low lands, dentrification and volatile ammonia losses are considerable. The N losses from these soil could be minimized by proper management such as rate, methods and time of application. The coating of urea with S has shown some improvement in increasing efficiency. Nitrification and urea hydrolysis inhibitors can improve fertilizer efficiency in certain situations provided they are properly used. The efficiencies of these inhibitors depend on the nature of the chemical compounds, soil properties, and method of application. Low efficiency of applied P fertilizer is mainly due to retention of P by soil clay fractions and iron and aluminum hydroxides. Even though retained P is not available to the first crop, it is made available to a certain extent to the succeeding crops. The rate and methods of P applications and forms of P determine the efficiency of applied P fertilizers. The use of native rock phosphate along with P fertilizers on acid soils appears to be an attractive alternative in reducing the fertilizer cost. The loss of K in tropical soils is largely attributed to leaching and runoff. To reduce K loss by leaching, it is more advisible to apply K in split doses than a single dose. Liming has a beneficial effect in retention of K and reducing P fixation in acid soils.