Highly soluble N fertilizers like urea may be lost from the soil plant system through leaching, volatilization, and denitrification thereby reduce yields and NUE of arable crops. This study was carried out to investigate the effects of slow nitrogen (N) releasing fertilizer (UREAStabil) on NUE and yields of bread wheat and determine optimum rate of N application for bread wheat production. A field experiment was carried out in 2015 main cropping season at Hawzien and at Emba Alaje districts in Tigray Regional State, Ethiopia. Cambisols and Vertisols are the two dominant soil types at Hawzien and Emba Alaje districts, respectively. The experiments were arranged in a randomized complete block design with three replications on six farmers’ fields. Treatments were four levels of nitrogen fertilizer (0, 32, 64 and 96 kg N ha-1). The nitrogen source was UREAStabil, which is slow N releasing fertilizer. Conventional urea at recommended rate (64 kg N ha-1) was included as a control at both sites. Soil samples were collected before planting and analyzed for selected physicochemical properties. Pre-planting soil analysis results revealed that total N was low at Suluh site in Hawzien (0.051% to 0.082%) and medium at Ayba and Atsela sites in Emba Alaje (0.157% to 0.211%). Application of 64 kg N ha-1 as UREAStabil and conventional urea resulted in the highest grain yields of 1708.33 kg ha1 and 5467.9 kg ha-1 from in Hawzien and Emba Alaje districts, respectively. The highest agronomic efficiency of 9.46 kg kg-1and apparent N recovery of 55% were obtained from 64 kg N ha-1 as UREAStabil. However, the maximum physiological efficiency of 60.28 kg kg-1 was obtained from the same rate as conventional urea at Suluh site in Hawzien district. The highest agronomic efficiency of 22.2 kg kg-1, physiological efficiency of 87.05 kg kg-1, and apparent N recovery of 59.7% was obtained from 64 kg N ha-1 as conventional urea at Atsela and Ayba sites in Emba Alaje district. Both biological and partial budget analysis reveals that the use of N at rate of 64 kg N ha-1as UREAStabil and 64 kg N ha-1 as conventional urea could give optimum bread wheat yield in Hawzien and in Emba Alaje, respectively, and in areas where the rainfall distribution and soil type is similar with study districts where this experiment was conducted. Further study is also required on split application of UREAStabil at the study sites.