lntercropping of Azolla with rice transplanted in rectangular (10 × 40 cm) spacing produced greater biomass and accumulated more nitrogen in the Azolla than its intercropping in square (20 × 20 cm) spacing. The differences in biomass and N accumulations were greater in the second crop of Azolla at 50 days after transplanting (DAT) of the rice crop than in the first crop of Azolla at 30 DAT. The E-W direction of rice rows in the rectangular spacing produced greater biomass and fixed more nitrogen in the Azolla than with rice rows in the N-S direction. Growing and incorporating Azolla once before transplanting and twice after transplanting produced the highest grain and straw yields, greatest number and weight of panicles, and N uptake by rice. The application of Azolla also significantly improved the soil fertility by increasing total N, organic C and available P of the soil.