The indica and japonica rice (Oryza sativa) subspecies differ in nitrate (NO3-) assimilation capacity and nitrogen (N) use efficiency (NUE). Here, we show that a major component of this difference is conferred by allelic variation at OsNR2, a gene encoding a NADH/NADPH-dependent NO3- reductase (NR). Selection-driven allelic divergence has resulted in variant indica and japonica OsNR2 alleles encoding structurally distinct OsNR2 proteins, with indica OsNR2 exhibiting greater NR activity. Indica OsNR2 also promotes NO3- uptake via feed-forward interaction with OsNRT1.1B, a gene encoding a NO3- uptake transporter. These properties enable indica OsNR2 to confer increased effective tiller number, grain yield and NUE on japonica rice, effects enhanced by interaction with an additionally introgressed indica OsNRT1.1B allele. In consequence, indica OsNR2 provides an important breeding resource for the sustainable increases in japonica rice yields necessary for future global food security.