Excessive nitrogen (N) fertilizer has threatened the survivability and sustainability of agriculture. Improving N productivity is promising to address the above issue. Therefore, the field experiment, which investigated the effect of no-till and N fertilizer reduction on water use and N productivity of spring wheat (Triticum aestivum L.), was conducted at Wuwei experimental station in northwestern China. There were two tillage practices (conventional tillage, CT; and no-till with previous plastic film mulching, NT) and three N fertilizer rates (135 kg N ha–1, N1; 180 kg N ha–1, N2; and 225 kg N ha–1, N3). The results showed that NT lowered soil evaporation (SE) by 22.4% while increasing the ratio of transpiration to evapotranspiration (T/ET) by 13.6%, compared with CT. In addition, NT improved the total N accumulation by 11.5% and enhanced N translocation (NT) quantity, rate, and contribution by a range of 6.2–23.3%. Ultimately, NT increased grain yield (GY), N partial factor productivity, and N harvest index by 13.4, 13.1, and 26.0%, respectively. Overall, N1 increased SE (13.6%) but decreased T/ET (6.1%) compared with N3. While, N2 enhanced NT quantity, rate, and contribution by a range of 6.0–15.2%. With the integration of NT, N2 achieved the same level of GY and N harvest index as N3 and promoted N partial factor productivity by 11.7%. The significant positive correlation of NT relative to T/ET and GY indicated that improving T/ET was essential for achieving higher NT. Therefore, we concluded that no-till coupled with N fertilizer rate at 180 kg N ha–1 was a preferable management option to boost the N productivity of spring wheat in arid areas.