In the dry season, in plots that were puddled, Azolla sp. was incorporated into the soil. Rice cv. IR26 seedlings were transplanted, and Azolla sp. was inoculated twice after transplanting. Without added P and puddling an increase of 1.3 t grain/ha was obtained with Azolla sp. inoculation; puddling tended to reduce yield response to Azolla sp. In the wet season, without added P, a 12% or 0.4 t/ha increase in rice grain yield was obtained with Azolla sp. inoculation.