Bridging yield gaps in staple crops is widely reported as a highly efficient means for improving grain production. However, changes in production efficiency and the environmental footprint remain less investigated when narrowing these gaps. In this study, we collected data from 299 wheat plots on the Loess Plateau of China to identify changes in nitrogen efficiency, nutrient balance, and environmental risks when narrowing the yield gaps. The low-yielding (LY) and high-yielding (HY) plots had an average yield gap of 1936 kg ha–1 (33.5%) and nitrogen partial factor productivity gap of 10.3 kg kg–1 (30.1%) that were simultaneously narrowed under similar fertilizer inputs. Optimizing sowing date improved spikes per m2 (27.4%) and grains per head (12.9%), key measures to improving wheat grain yields. The high-yielding high-efficiency (HYHE) plots produced on average 43.0% and 14.6% higher nitrogen partial factor productivity and grain yield, respectively than the high-yielding low-efficiency (HYLE) plots. Appropriate nitrogen fertilizer inputs significantly enhanced nitrogen use efficiency and maintained grain yield on HY plots. Grain yield and nitrogen partial factor productivity gradually increased with year of cultivar release (1995–2019) (P < 0.05). However, soil organic matter, pH, available phosphorus, mineral nitrogen, and available potassium had no significant effect on grain yield or nitrogen use efficiency. The HYHE plots had the lowest nitrogen surplus (25 kg N ha–1), phosphorus surplus (31 kg P ha–1), and greenhouse gas emissions (2327 kg CO2-eq ha–1) of the surveyed plots. In the HY plots, moderate potassium fertilizer should be supplemented to balance wheat production. In conclusion, excellent cultivars and high plant density are key for bridging the yield gap between LY and HY plots. Optimizing fertilizer management could further promote HY plots from low to high production efficiency. This research provides farmers with the knowledge and methods to sustainably bridge field-level yield gaps in dryland wheat production.