The recovery of soil derived nitrogen (N DFS ) and fertilizer N (N DFF ) was investigated in highland rice (Oryza sativa L.) fields in Bhutan, characterized by high inputs of farmyard manure (FYM). The effect of 60 kg N ha −1 (60 N) applied in two splits to a traditional and an improved cultivar, popular among the farmers, was investigated using the 15 N isotope dilution technique. No differences were found between cultivars with respect to the uptake of N DFS and N DFF , but the improved cultivar yielded 27% more (P≤0.05) grain compared with the traditional cultivar. This was largely due to its greater harvest index (HI). The mean percentage recovery of fertilizer N (REN) applied at 45 days after transplanting (DAT) was 34% compared to 22% at 7 DAT, resulting in 56% greater uptake of N DFF at 45 DAT. The overall REN for both the improved and the traditional cultivars were 25.7% and 30% respectively, with no difference between cultivars, but REN decreased with increasing FYM inputs. Fertilizer N recommendations that allow for previous FYM inputs combined with applications timed to coincide with maximum crop demand (45 DAT), and the use of improved cultivars, could enhance N fertilizer recoveries (REN) and increase rice yields in the Bhutan Highlands.