The excessive nitrogen (N) fertilizer input coupled with flood irrigation might result in higher N leaching and lower nitrogen recovery efficiency (NRE). Under an intensive rice system in the Ningxia irrigation region, China, environmental friendly N management practices are heavily needed to balance the amount of N input for optimum crop production while minimize the nitrogen loss. The objective of this study was to determine the influences of side-dressing (SD) technique in mechanical transplanting systems on the NRE, N leaching losses and rice yield in anthropogenic-alluvial soil during two rice growing seasons (2010-2011). Four fertilizer N treatments were established, including conventional urea rate (CU, 300 kg ha–1 yr–1); higher SD of controlled-release N fertilizer rate (SD1, 176 kg ha–1 yr–1); lower SD of controlled-release N fertilizer rate (SD2, 125 kg ha–1 yr–1); and control (CK, no N fertilizer). Field lysimeters were used to quantify drainage from undisturbed soil during six rice growing stages. Meanwhile, the temporal variations of total nitrigen (TN), NO3 –-N, and NH4 +-N concentrations in percolation water were examined. The results showed that SD1 substantially improved NRE and reduced N leaching losses while maintaining rice yields. Across two years, the averaged NRE under SD1 treatment increased by 25.5% as relative to CU, but yet the rice yield was similar between two treatments. On average, the nitrogen loss defined as TN, NH4 +-N, and NO3 –-N under the SD1 treatment reduced by 27.4, 37.2 and 24.1%, respectively, when compared with CU during the study periods. Although the SD2 treatment could further reduce N leaching loss to some extent, this technique would sharply decline rice yield, with the magnitude of as high as 21.0% relative to CU treatment. Additionally, the average NRE under SD2 was 11.2% lower than that under SD1 treatment. Overall, the present study concluded that the SD technique is an effective strategy to reduce N leaching and increase NRE, thus potentially mitigate local environmental threat. We propose SD1 as a novel alternative fertilizer technique under an irrigated rice-based system in Ningxia irrigation region when higher yields are under consideration.