Maize and soybean are commonly intercropped in the drier zones of the western mid-hills in Nepal, but farmers report that productivity of soybean has been declining in recent years. Two researcher managed on-farm field experiments were conducted in the mid-hills environment of Nepal during 2001 and 2002, and one glasshouse experiment at the University of Wales, Bangor during 2003, to determine whether varying densities of maize and soybean influenced productivity of the system and to what extent soybean exhibited adaptation to shade. In neither season was maize yield affected by the presence of soybean, but grain yield of soybean was reduced in mixture by means of 59 and 53% during 2001 and 2002 respectively. Biomass and grain yield of maize were greatest at 53×103 plants ha−1 and least at the lowest density, whilst conversely biomass and grain yield of soybean increased. With increasing maize density, rates of accumulation of dry matter and leaf area index also increased, the latter resulting in decreasing transmission of light to the intercropped soybean. Soybean exhibited no photosynthetic adaptation to shade, but the specific leaf area was greater in artificially shaded and intercropped plants. Land equivalent ratios of all intercrops were greater than unity (1.30 to 1.45), indicating higher efficiency of intercropping compared to sole crops. Given the low plasticity in response of the maize canopy to variations in density, it is suggested that soybean could be better grown under maize by increasing between-row spacing of maize from 0.75 to 1.0 m to improve light transmission to the understorey, resulting in higher overall productivity of the intercropping system, and also that soybean germplasm be screened for adaptation to shade.