Abstract: A field experiment was carried out in the Taihu Region to study economic benefit,fertilizer use efficiency and environmental benefit of reducing nitrogen application rate throughout the entire rice growing season with the purpose of providing the local government with scientific basis in promoting reduction of nitrogen application rate.Results show that nitrogen content in the surface water of paddy fields would remain high for at least 7 days after fertilizer application,which calls for prudence in draining the fields within the period.In view of the current nitrogen application rate in the Taihu area,it is practically feasible to reduce the rate somewhat.Reduction by 20% can not only effectively lower nitrogen content in the surface water,and hence total nitrogen in the runoff into the environment,but also improve agronomic efficiency of the nitrogen fertilizer and its effect on the factors affecting rice yield,thus leading to higher crop yield,and eventually harmonization of economic benefit,fertilizer utilization efficiency and environmental benefit of nitrogen application.