Abstract: The application of fertilizers along with straw incorporation was a common practice in sustainable crop production. A field experiment under different N-fertilizer application rates with full straw incorporation was conducted to explore N application rate for optimal crop yield and economic benefit in Taihu Lake region. Five treatments were designed with 0 (N0), 120 kg(N)·hm^-2 (N1), 180 kg(N)·hm^-2 (N2), 240 kg(N)·hm^-2 (N3) and 300 kg(N)·hm^-2 (N4) N-fertilizer application rates each with 6 t·hm^-2 incorporated straw. Results showed that rice yield initially increased with increasing N-fertilizer rates and then decreased. The maximum rice yield in 2007 and 2008 was 8 543 kg·hm^-2 and 7 772 kg·hm^-2, respectively. Compared with N0 treatment, rice yield for the two years of N-fertilizer application (treatment N1~N4) increased by 9.6%~19.4% and 13.0%~17.8%, respectively. Compared with N0~N3 treatments in 2008, N4 treatment presented obviously lower marginal yield (4.5 kg·kg^-2), agronomic use efficiency of N-fertilizer 3.0 kg·kg^-1(N), seed setting rate (69.9%), 1000-grain weight (25.1 g), additional net-income rate (0.91%), and marginal cost return rate (1.03 Yuan·Yuan^-1). A fitted rice yield, economic benefit and N-fertilizer application rate equation showed an optimal N-fertilizer rate of 218~223 kg·hm^-2, under which the optimum rice yield and maximum economic benefits were 7 686~ 8 295 kg·hm^-2 and 7 413~8 607 Yuan·hm^-2, respectively. Optimum N-fertilizer application with full straw incorporation not only achieved the best economic benefits, but also the highest rice yield and nitrogen utilization efficiency.