Topdressing of N fertilizer, whenever leaf greenness, as measured by Chlorophyllmeter (SPAD), falls below the threshold value can be used for site-specific N management in wheat cultivation. Herein, a field experiment was conducted to analyse the effect of SPAD-based N management on wheat productivity and N use efficiency during the dry season of 2010/11 and 2011/12 on acid lateritic soil of eastern India. The experiment had 12 treatments, with nine treatments combining three SPAD thresholds (38, 40 and 42) and three N levels (15, 25 and 35 kg N ha−1) as real time N management (RTNM), one fixed time N management (FTNM), one farmers’ fertilizer practise (FFP) and control (Zero N), with three replications. The grain yield of RTNM ranged from 90 to 113% as that of FTNM, but using considerably less N. Maintaining SPAD threshold of 40 up to heading stage by topdressing 25 kg N ha−1 at each time (N25S40) caused the highest grain yield (4483 kg ha−1). While saving 22.5 kg N ha−1 (18.8%), N25S40 increased agronomic N use efficiency by 58.5%, nitrogen recovery efficiency by 15.1% and partial factor productivity of applied N by 26.4% when compared with conventional fertilizer recommendations (i.e. FTNM). The SPAD-based N management strategy was found very promising in efficiently managing N fertilizer in wheat for improving wheat productivity and N use efficiency.