Abstract: In order to obtain higher grain yields and water use efficiency (WUE), the effects of different nitrogen levels 0 kg(N)·hm^-2, 140 kg(N)·hm^-2, 221 kg(N)·hm^-2 and 300 kg(N)·hm^-2 on the productivity and WUE of wheat/maize intercropping system under straw mulching were studied. A field experiment was conducted in the oasis region of Shiyang River Basin in Gansu Province during the period from March to October 2012. The results showed that grain yield (5 036 kg·hm^-2) and WUE (25.13 kg·hm^-2·mm^-1) reached the maximum at nitrogen application rate of 221 kg(N)·hm^-2 in monoculture wheat. Grain yield (3 078 kg·hm^-2 and WUE (39.76 kg·hm^-2·mm^-1) reached the maximum at nitrogen application rate of 300 kg(N)·hm^-2 in intercropped wheat. Also grain yield (9 921 kg·hm^-2) and WUE (38.96 kg·hm^-2·mm^-1) reached the maximum in monoculture maize, grain yield (6 895 kg·hm^-2) and WUE (46.31 kg·hm^-2·mm^-1) reached the maximum in intercropped maize at nitrogen application rate of 300 kg(N)·hm^-2. Competitive capacity of wheat relative to maize was maximum (0.049) at nitrogen application rate of 0 kg(N)·hm^-2. Land equivalent ratio of wheat/maize intercropping system was maximum (1.33) at nitrogen application rate of 300 kg(N)·hm^-2. Then water competition ratio of wheat relative to maize was maximum (0.98) at nitrogen application rate of 140 kg(N)·hm^-2. The results showed that wheat/maize intercropping system had significant advantage in terms of yield and water use efficiency and wheat competitiveness was greater than that of maize. It was noted that the difference in time of water demand for physiological use by wheat and maize was the driver for the high WUE in wheat/maize intercropping system. Reasonable nitrogen application enhanced the advantages of yield and water use efficiency.