Transplanting single seedlings rather than seedlings in clumps has been increasingly attractive in hybrid rice production in China due to reduced seed requirements and higher grain yield. This study was conducted to determine grain yield and nitrogen (N) utilization in response to reductions in the N rate in hybrid rice under single-seedling transplanting. Field experiments were done in 2015 and 2016 on a moderate to high fertility soil at the Experimental Farm of Hunan Agricultural University, China. The hybrid rice cultivar Liangyoupeijiu (LYPJ) was used in 2015, and two hybrid cultivars LYPJ and Xiangliangyou 900 were used the next year. In each year, the rice plants transplanted with a single seedling per hill were grown with three N rates, including the usual N rate (150 kg ha–1) and two reduced N rates (120 and 90 kg ha–1). Grain yield, yield attributes, and N uptake and use efficiency were determined for each N rate. Significant reduction in grain yield was observed in only one of three cultivar-year combinations when N rate was reduced by 20% (from 150 to 120 kg ha–1), and the magnitude of yield reduction was only 4%. Although significant reduction in grain yield was observed in two of the three cultivar-year combinations when N rate reduced by 40% (to 90 kg ha–1), the highest yield reduction was only 7%. Yield attributes were generally changed slightly when N rate was reduced by 20%, while compensation among yield attributes and N utilization characteristics could explain why a 40% reduction in N rate did not result in substantial yield loss. Partial factor productivity of applied N (PFPN) was increased by 21–24% and 56–63% with 20% and 40% reductions in the N rate, respectively. The higher PFPN with a reduced N rate was attributed to higher recovery efficiency of applied N (REN) or to both higher REN and internal N use efficiency. Our study suggests that reducing N rate does not necessarily result in yield loss due to compensation among yield components and increased N use efficiency in hybrid rice transplanted as single seedlings under moderate to high soil fertility conditions.