A greenhouse experiment was carried out to study the effect of Azolla and /or cyanobacteria inoculation each alone or in combination with chemical nitrogen fertilizer (urea) on rice growth and yield production. Slightly higher rice yield observed in cyanobacteria (SBI) inoculated plots were not significantly different from corresponding non- inoculated treatments. Applying 60 kg Nha^-l as urea or as Azolla had similar effect on grain yield. Highest yield was obtained with the combination of 30 kg Nha^-l as urea and 30 kg Nha^-l as Azolla. This value was not significantly different from the values obtained with 60 kg Nha^-l as urea but was significantly higher than that obtained with 60 kg Nha^-l as Azolla. Azolla and / or cyanobacteria did not affect the rice harvest index . The nitrogen use efficiency decreased with increasing nitrogen level. The highest plant nitrogen uptake was recorded when Azolla mixed with urea at 30 kg Nha^-l each. Results show that Azolla application alone or in combination with urea is more beneficial to rice than inoculation with cyanobacteria. Azolla also increased significantly the soil organic carbon content.