A field study was conducted at the College of Agriculture, Shiraz University, Shiraz, Iran to evaluate the effect of different crop residue and nitrogen rates on yield and yield components of two dryland wheat (Triticum aestivum L.) cultivars. The experiment was conducted as a strip split plot with four replications. Vertical plots included two dryland current wheat cultivars (Azar2 and Nicknejad), while the horizontal plots constituting crop residue rates (0.500 and 1000 kgha-1) and sub-plots the three N rate (0.35, and 70 kg N ha-1) treatments. Results indicated that when crop residue completely returned to the soil (100 %), N return rates should be proportional to residue rate. Fertile spike No. per plant, grains per spike, grains per plant and 1000-grain weight significantly increased (p<%1) with increased N and residue rates in both cultivars. When the crop residue completely applied and N rate was suitable and proportional with crop residue rate, better infiltration might have promoted soil moisture conservation. When the crop residue was completely returned to the soil, but N rates not adequate and proportional with crop residue, yield components significantly diminished in either one of the cultivars. The highest grain yields were obtained from 1000 kg ha-1 of residue, and 70 kg of N ha-1 in Azar2. Azar2 had a significantly higher grain yield than Nicknejad variety. The correlation coefficients between grain yield and spike No. per m-2, grains per spike, grains per plant, biological yield as well as harvest index were observed as positive.