Henry Fonda did not receive an Oscar nomination for portraying Eddie Taylor in You Only Live Once.
As with his friend Jimmy Stewart very few of Henry Fonda pre-1939 films receive much mention. The period in the 30's is interesting for both of them as you can see the development towards their onscreen persona that they would be best known for. Fonda, like Stewart, was sometimes cast as the romantic lead often in very simple roles. That is what appears you'll find here in You Only Live Twice. There are hints of another turn, but early on it feels like it may be a fairly straight forward romance film between Fonda's Eddie and his wife Joan (Sylvia Sydney). As one would expect Fonda is charming enough, though his aw shucks routine never was quite as as endearing as old Stewart's. He still makes Eddie likable enough just as his fortunes begin to turn south because of his history as an ex-con.
As the film takes its darker turn, where Eddie is wrongly accused and convicted of murder as well as sentenced to death by the electric chair, Fonda is actually challenged within the role after this point. There is further challenge though in the structure of the film as well though which often gives as much of an emphasis on those around Eddie than Eddie himself. Fonda though actually is quite good even early on in conveying the underlying sense of discontent in Eddie as he is consistently given the short end for his background. He's mostly aw shucks, but he does grant bit of darkness in there alluding to the background as well. When he's actually put in prison Fonda helps to carry the tone away from the earlier lighter style to where it goes, and where it goes is actually fairly surprising. This is not a story about an innocent man being put away and it just focusing on him getting out. In fact it actually feels at least little bit like Straight Time with Eddie's descent basically caused by societies refusal to believe that he can reform.
When Eddie is taken to prison, and basically given a set date for his own death, Fonda's performance reflects the anguish of this. He drops any notion of an aw or shucks in his honest portrayal of the disbelief at his terrible luck, but also even a definite intensity portraying the man's hatred against the lot he's been given. As it seems as though nothing will turn in his favor the film actually depicts Eddie attempting suicide. It is a great scene for Fonda as he so powerfully exudes the despair in Eddie as he begins to fashion his "tool", but also still gives this certain discontent as though Eddie is doing it in part to at least get something his way for once. Eddie is saved though just to be killed which leads to an escape attempt. Again Fonda manages to take the role where it needs to go in depicting the viciousness in Eddie as he lashes out believing that almost everyone has wronged him. Fonda maintains a descent in Eddie even after he escapes with his wife and they go out on a lamb. He importantly never returns any happiness in Eddie even as they seem to have a chance, staying true to the character as kind of a broken man. The film itself could have been better if it gave more time for Fonda to develop this progression, though he does well with the little he has it doesn't quite have the impact it could have. The performance though is strong, while doesn't hit the heights of his later work, it does suggest that same talent.