Rice is the staple food for the significant population of Asia. Due to projected population growth in this region, the demand for this food is also predicted to be increased exponentially soon. Nitrogen (N) plays a dominant role in increasing rice yield as it is the most critical yield-limiting nutrient of rice. Chemical N fertilizers which are a major source in supplying N nutrients to rice, have adverse effects on overall soil and environmental health in the long term. The application of free-floating aquatic fern Azolla as a biofertilizer can be an alternative to improve rice yield without degrading the environment. It provides a natural source of many nutrients, especially N, improves the availability of other nutrients, plays a critical role in weed suppression, enhances soil organic matter, and improves efficiency of the inorganic fertilizers while maintaining the suitable soil pH condition for rice growth, which overall contribute to rice yield increment. Therefore, Azolla application has tremendous potential to improve soil health and boost yield sustainability.