Ammonium (NH4+) can enhance the water stress induced drought tolerance of rice seedlings in comparison to nitrate (NO3-) nutrition. To investigate the mechanism involved in nitrogen (N) uptake, N metabolism and transcript abundance of associated genes, a hydroponic experiment was conducted in which different N sources were supplied to seedlings growing under water stress. Compared to nitrate, ammonium prevented water stress-induced biomass, leaf SPAD and photosynthesis reduction to a significantly larger extent. Water stress significantly increased root nitrate reductase (NR) and nitrite reductase (NiR) activities, but decreased leaf NiR and glutamate synthetase (GS) activities under NO3- supply, causing lower nitrate content in roots and higher in leaves. In contrast, under NH4+ supply root GS and glutamine oxoglutarate aminotransferase (GOGAT) activities were significantly decreased under water stress, but remained higher in leaves, compared to NO3- treatment, which was beneficial for the transport and assimilation of ammonium in leaves. N-15 tracing assays demonstrated that rice N-15 uptake rate and accumulation were significant reduced under water stress, but were higher in plants supplied with NH4+ than with NO3-. Therefore, the formers showed higher leaf soluble sugar, proline and amino acids contents, and in turn, associated with a higher photosynthesis rate and biomass accumulation. Most genes related to NO3- uptake and reduction in roots and leaves were down-regulated; however, two ammonium transporter genes closely related to NH4+ uptake (AMT1;2 and AMT1;3) were up-regulated in response to water stress. Overall, our findings suggest that ammonium supply alleviated waters tress in rice seedlings, mainly by increasing root NH4+ uptake and leaf N metabolism.