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A field experiment of factorial randomized block design was conducted with barley (Hordeum vulgare L.) to evaluate the effect of organic matter and fertilizer N placement on the efficiency and immobilization of applied N. Also, the experiment was to determine whether immobilization was a factor in causing the differences in efficiencies for broadcast and banded N. The plots used consisted of open‐ended iron cylinders 35 cm in diameter pressed into the soil to a depth of 25 cm. Labelled urea containing 19.15 atom %15N was either banded at 10 cm soil depth or surface broadcast at a rate of 100 kg N/ha. Oat straw (Avena sativa L.) was used us the organic matter source and applied at 5,000 kg/ha and was either mixed throughout the soil to a 10 cm depth or spread evenly on the soil surface. Fertilizer N removed by the above‐ground portion of the crop and that remaining in the 100 cm soil depth at harvest time was determined. Nitrogen uptake and barley yield were greater from banded N than from broadcast N. The differences in uptake for the two methods of N placement were enhanced by adding organic matter to the soil. Recovery of fertilizer N in plant tops varied between 22.8 and 42.8% for urea surface broadcast and between 42.0 and 53.1% for urea applied in a band. About 83 to 87% and 82 to 95% of the applied N was accounted for in the soil and plant at the end of the experiment for broadcast and band‐N applications, respectively. Leaching losses of applied N were negligible for both methods of N application. Significantly more labelled N was found in soil from the broadcast than from the banded fertilizer (40.3 vs. 34.0% of added N) at the end of the experiment and the effect was particularly enhanced by mixing straw with the soil. Since leaching losses were negligible and unaccountable differences probably as gaseous losses were essentially the same for broadcast and banded N applications (13 and 15%, respectively), the superiority of banded N over broadcast N applications with respect to barley yields and N uptake was largely due to the reduced immobilization of banded N.