Field experiments, conducted during 1992/93 and 1993/94 at the Indian Agricultural Research Institute, New Delhi, indicated that dicyandiamide (DCD) blended with urea produced taller wheat plants with more grains ear−1 and thus higher grain and straw yields than following urea alone. The economic optimum dose (EOD) of nitrogen was estimated to be 73 kg N ha−1 for DCD-blended urea (8[ratio ]2) and 84 kg N ha−1 for urea alone, and the grain kg−1 N of the crop at the EOD was calculated to be 23 kg grain kg−1 N with DCD-blended urea and 18·6 kg grain kg−1 N with urea alone. Thus DCD-blended urea produced more grain using less nitrogen than urea alone. The nitrogen requirement for a targeted yield of 4 t ha−1 was also less when using DCD-blended urea (29 kg N ha−1) than when using urea alone (38 kg N ha−1). The DCD-blended urea resulted in higher N, P and K uptakes, agronomic efficiency and apparent recovery of nitrogen than urea alone.