Yield decline resulting from continuous cropping of aerobic rice is a constraint to the widespread adoption of aerobic rice technology. Shifts in water management from flooded to aerobic conditions are known to influence the availability and form of N present in the soil and might require a different approach to N management in aerobic rice. The present study was conducted to determine the effects of different N sources on the plant growth and grain yield of aerobic rice. Four pot experiments were conducted in which rice was aerobically grown in soil that was taken from fields where aerobic rice has been cultivated for 11 consecutive seasons and an adjacent field where flooded rice has been grown continuously. Nitrogen was applied as ammonium sulfate, urea, ammonium chloride, ammonium nitrate and potassium nitrate at four N rates of 0.3, 0.6, 0.9 and 1.2 g N pot−1. Two unfertilized controls consisting of soil that was either untreated or oven heated at 120°C for 12 h were also included. Plants were sampled during the vegetative stage or at maturity to measure plant growth, N uptake, grain yield and the yield components. Growth of aerobic rice in aerobic soil was generally better with the application of ammonium-N than nitrate-N. Potassium nitrate decreased plant growth and caused plant death at the high N rate. Ammonium sulfate was more effective in improving the vegetative plant growth, N nutrition and grain yield of aerobic rice than urea at the high N rates. The application of ammonium sulfate achieved the same and even better plant growth than the soil oven-heating treatment. These results suggest that there is a possibility of reversing the yield decline observed in the continuous aerobic rice system by using the right source of N fertilizer at the optimal rate.