Field experiments were conducted to study the competition effect of winter wheat planted in a square arrangement and Italian ryegrass planted randomly on biomass yields of both species, ryegrass seed yield, N use efficiency, and progeny seed germination. Increases in wheat density up to 800 plants/m2 reduced ryegrass seed yield by 87% but increased its harvest index up to 42% compared to its monoculture yield. Species densities and their interactions accounted for 66 to 73% of the total variation in per-unit area biomass of species, and their association was more favorable to ryegrass biomass than wheat. Seeds of each species had three times greater nitrogen percentage than did shoots. Intra- and interspecific competition increased nitrogen percentage in wheat seeds. In Italian ryegrass, only interspecific competition increased N percentage in seeds. Although total nitrogen uptake by winter wheat was three times greater than in Italian ryegrass, Italian ryegrass was two times more efficient than wheat at producing biomass per unit of N taken up and specific leaf area at heading stage in mixture. Germination percentages of progeny seeds of both species in mixtures were greater in presence of high densities of the companion species than in their monocultures. Nitrogen was not the main limiting factor for competition between winter wheat and Italian ryegrass in this study.