ABSTRACT Intercropping corn and palisade grass is a technique to increase straw production, soil C contents, nutrient cycling and crop yield. However, concerns arise from nitrogen (N) uptake by the intercropping crop causing reduction in the yield of the corn. Our objective was to evaluate N recovery efficiency (NRE), and the N dynamics in the soil-plant system in corn intercropped with palisade grass. A field trial was carried out in Bahia, Brazil, evaluating two cropping systems: corn (monoculture) and corn intercropped with palisade grass sowed between rows on the same day as the corn crop, with four replicates in a completely randomized block design. Nitrogen (150 kg∙ha–1of 15N-urea) was applied at sowing to determine NRE, which means the amounts of N-fertilizer uptake in corn and palisade grass, the amounts of N-fertilizer in soil and the 15N-fertilizer balance. Neither the NRE (63.3% in monoculture and 57.2% in intercropping) nor corn grain yield (9,800 kg∙ha–1 in monoculture and 9,671 kg∙ha–1 in intercropping) was affected by intercropping, which accumulated only 2.1 kg∙ha–1 of N-fertilizer or 1.4% N rate. In addition, palisade grass yielded 2,265 kg∙ha–1 of dry matter. The balance indicated that 82.4% of N-fertilizer was recovered in the monoculture and 86.9% in the intercropping. Intercropping palisade grass does not affect grain yield or N corn nutrition and has the potential to increase straw production contributing to maintenance of no-till.