Nitrogen often becomes limiting factor for rice production. A large number of rice farmers in developing countries either do not use or use low levels of nitrogen fertilizers mainly because of its high price. In such a situation, the question arises: how is soil fertility in wetland paddy soils maintained over the years even though a substantial amount of nitrogen is removed by the rice crop, or is lost by leaching, denitrification, and ammonia volatilization? Long term fertility trials with rice in Japan and the Philippines suggest that as much as 50 to 75 kg N per ha is added every year. Most of this nitrogen is thought to come from fixation by free living and rice plant-associated microorganisms. Some nitrogen also comes from rainfall, irrigation, floodwater, silt and atmospheric ammonia. Experiments conducted at IRRI [The International Rice Research Institute, Philippines], employing the acetylene-reduction technique, labeled nitrogen, and Kjeldahl technique for nitrogen balance suggested that a significant amount of dinitrogen is fixed in rice fields by these N2 fixing microorganisms and that a part of this fixed nitrogen is immediately utilized by the rice plant. It is difficult to generalize that any one group of these microorganisms is most active in N2 fixation in all or most flooded rice soils. At the moment, Azolla is used in very few countries in Asia because limiting factors are associated with its application: phosphorus requirement, pest problem, labor need, and difficulty of growth at high temperature. On the other hand, the indigenous blue-green algal flora that is more common in rice fields is more susceptible to biotic, climatic and edaphic factors. Whether blue-green algal or Azolla or both are present or absent, free living and rice plant-associated N2 fixing bacteria are generally active in wetland rice fields. The continuous maintenance of nitrogen fertility is, therefore, a result of the combined effort of all the nitrogen fixing organisms. This paper further suggests that a critical, long term study should examine the feasibility of applying rice crops residues as substrate for bacterial nitrogen fixation.