Fertilizer application in excess of plant nitrogen requirements, leading to nitrogen use inefficiency has become main culprit of nitrogen surplus, posing nonpoint pollution threats. Chao Lake has been recipient of nitrogen loadings, mainly coming from the agroecosystem surrounding it. This study was conducted in Chao Lake watershed to assess nitrogen use efficiency, crop yield and nitrogen loading, using reduced and conventional fertilizer rates, based on ten years field monitoring and experiment. Paddy rice - wheat rotational tillage arranged in a completely randomized design using 30m2 treatment plots was employed to study hypothesis. Three indicators namely agronomic efficiency (kgkg-1), recovery efficiency (%) and partial factor productivity (kgkg-1) were considered for nitrogen use efficiency. For nitrogen loading, nitrogen loading (kg ha-1yr-1), nitrogen runoff loss ratio (%) and net nitrogen runoff loss ratio (%) were taken. Results revealed, empirical formula of an exponential model explains the relationship. Reduced fertilizer levels produced high nitrogen use efficiency, high economic yield and less nitrogen loading. Nitrogen use efficiency was in order of: reduced > high > conventional fertilization treatments, while it decreased in ten years (2008 -2018) across all treatments. Nitrogen loading increased in ten years, both for rice and wheat growing seasons. Runoff volume influenced nitrogen loading more than other environmental factors considered. Such strategies that further reduce fertilizer levels by accounting for excessive supplies are critically important to consolidate effective nitrogen management measures.