Field experiments were conducted to find out the best optimization strategy for nitrogen and mulching for high yield and water use efficiency (WUE) of maize and wheat. Three nitrogen practices (250 kg Nha -1 for maize and 120 kg Nha -1 for wheat in single split, 200 kg Nha -1 for maize and 100 kg Nha -1 for wheat in two and three splits) and two mulches (plastic film and straw mulch) were tested. Maximum maize grain yield was recorded in T 5 (plastic film + nitrogen in three splits) which was 75.6 and 81.4% higher over control in 2014 and 2015 respectively. T 6 (straw mulch + nitrogen in three splits) increased wheat grain yield by 40.7% and 46.9% in 2014 and 2015 respectively. The highest WUE of maize (11.0 kg ha -1 mm -1 in 2014 and 12.4 kg ha -1 mm -1 in 2015) and wheat (8.0 kg ha -1 mm -1 in 2014 and 9.0 kg ha -1 mm -1 2015) were recorded in T 5 and T 6 plots respectively. T 6 increased soil water contents and storage by increasing soil active carbon and decreasing bulk density. In conclusion, nitrogen (200 kg ha -1 for maize and 100 kg ha -1 for wheat) applied in three splits under straw mulched conditions is preferred optimization.