Increasing nitrogen (N) rate could accelerate the decomposition of crop residues, and then improve crop yield by increasing N availability of soil and N uptake of crops.  However, it is not clear whether N rate and plant density should be modified after a long period of cotton stubble return with high N rate.  This study seeks to assess the effects of N rate and plant density on cotton yield, N use efficiency, leaf senescence, soil inorganic N, and apparent N balance in cotton stubble return fields in Liaocheng, China, in 2016 and 2017.  Three plant densities 5.25 (D_5.25), 6.75 (D_6.75) and 8.25 (D_8.25) plants m^–2 and five N rates 0 (N₀), 105 (N₁₀₅), 210 (N₂₁₀), 315 (N₃₁₅), and 420 (N₄₂₀) kg ha^–1  were investigated.  Compared to the combination used by local farmers (D_5.25N₃₁₅), a 33.3% N reduction and a 28.6% increase in plant density (D_6.75N₂₁₀) can maintain high cotton yield, while a 66.7% N reduction at 6.75 plants m^–2 (D_6.75N₁₀₅₎ can only achieve high yield in the first year.  Biological yield increased with the increase of N rate and plant density, and the highest yield was obtained under 420 kg N ha^–1 at 8.25 plants m^–2 (D_8.25N₄₂₀) across the two years under investigation.  Compared to D_5.25N₃₁₅, N agronomic efficiency (NAE) and N recovery efficiency (NRE) in D_6.75N₂₁₀ increased by 30.2 and 54.1%, respectively, and NAE and NRE in D_6.75N₂₁₀ increased by 104.8 and 88.1%, respectively.  Soil inorganic N decreased sharply under 105 kg N ha^–1, but no change was found under 210 kg N ha^–1 at 6.75 plants m^–2.  N deficit occurred under 105 kg N ha^–1, but it did not occurr under 210 kg N ha^–1 at 6.75 plants m^–2.  Net photosynthetic rate and N concentration of leaves under N rate ranging from 210 to 420 kg ha^–1 were higher than those under N rate of 0 or 105 kg N ha^–1 at all three densities.  The findings suggest that D_6.75N₂₁₀ is a superior combination in cotton stubble retaining fields in the Yellow River Valley and other areas with similar ecologies.