Abstract:This paper described the interactive effects of fertilizer and water on yield and potential yield increase of crops. Fertilizer and water are decisive and controllable factors in agricultural production. The efficiency of fertilizer is siginificantly affected by soil moisture, escapcially in dryland. Fertilizer is the material base in water-soil system and water is a key factor in increasing fertilizer use efficiency. They are promotive and restrictive to each other. An excitation mechanism exists between fertilizer and water, which require a good management and proper balance of fertilizer and water, for the maximum economic benefit from use of these two limited resources.