In a field experiment conducted over four years, the efficient utilization of biologically-fixed N through Sesbania aculeate green manure was studied by allowing different periods of decomposition for the green manure before transplanting of wetland rice. The experiment involved three decomposition periods; 1, 7 and 14 days before transplanting (DBT)and 0, 60,90 and 120 kg N ha-1. 60-day-old Sesbania, on average, produced 23 and 4.6 t ha-1 of green and dry matter, respectively, and accumulated 104 kg N ha-1. Incorporation of green manure 1 DBT gave a significantly better grain yield of rice than its incorporation 7 and 14 DBT. The grain yield of rice transplanted one day after incorporation of green manure without fertilizer N was equivalent to 120 kg N ha-1 as urea. In wetland rice fields 40% of C and 80% of N of Sesbania green manure was mineralized in the first 10 days of incorporation. The release pattern of NH4+-N showed that its peak occurred during the first 10-14 days of green manure incorporation, followed by a decline thereafter. In laboratory incubations, amendment of soil with Sesbania resulted in the formation of NO3--N under both field capacity and saturated moisture regimes. The introduction of acetylene arrested the formation of NO3--N which might have been lost through leaching and denitrification upon flooding.