The low nitrogen utilization efficiency (NUE) of commercial fertilizers is one of the main hurdles in higher crop production and reduction of fertilizer N losses to the environment. However, interactions between most the macronutrients could have synergistic outcomes that affect crop NUE. The coating of urea with macronutrients and biopolymers may control N release and synergistically impact its crop NUE. In this study, urea was coated with 3% of different polymers, combined with 5% potassium iodide (KI) (i) Gum Arabica (GA + KI), (ii) polyvinyl alcohol (PVA + KI), and (iii) gelatin (Gelatin + KI) to control its N release, leaching, and increase of wheat NUE. Scanning electron microscopy, Fourier Transform Infrared spectroscopy (FTIR), and X-ray diffraction (XRD) analyses confirmed the successful coating of all KI and biopolymer combinations on urea granules. All coating combinations slowed down urea release in water and reduced its leaching from the soil, but the highest reduction in both parameters was observed with the GA + KI treatment, compared to the uncoated urea. After soil application, GA + KI decreased urea leaching by 26% than the uncoated urea in lysimeter. In the field, soil mineral N remained significantly high with the GA + KI and PVA + KI treatments at the wheat tillering, booting, grain filling and maturity stages, compared to the uncoated urea. However, K content was only high (28%) with the GA + KI treatment at final harvest. Likewise, microbial biomass N was only high with GA + KI at grain filling (20%) and maturity stages (24%) than the uncoated urea. Such synchronized N availability led to high wheat grain yield (28%), N (56%) uptake, and apparent N recovery (130%) with the GA + KI treatment, compared to the uncoated fertilizer. The increment in NUE with GA + KI could be due to the synergistic effect of K on N availability; therefore, we observed higher wheat yield and N utilization efficiency with this treatment. Hence, urea coated with macronutrient (K) plus biopolymer is recommended to improve wheat yield, NUE, and for reduction of environmental N losses.