A field experiment was conducted during kharif season of 1998-99 and 1999-2000 in deep black soils to study the effect of method ot Azospirillum (Soil application to nursery ot seedling root dip or both) and N levels (50,75 and 100 % of recommended dose of N) on the growth and yield of rice. The data revealed that application of 100 % N (150 kg/ha) recorded significantly higher seed yield (4704 Kg/ha) of rice over 75% (3999 kg/ha) and 50 % N (3796 kg/ ha). The straw yield and yield attributes (panicles/hill and seeds/panicle) followed similar trend. The agronomic efficiency decrease from 50.6 to 31.4 with the Increase in N from 50 to 100 % N/ ha. Net returns and B:C ratio were higher at 100% N. Application of Azospirillum did not influence the rice yields. However, interaction between N and Azospirillum Indicated that application of 75% N with Azospirillum to nursery and seedling dip recorded the rice yields similar to 100% N indicating a saving of 25% N.