The effect of urea-loaded cellulose hydrogel, a controlled-release fertilizer (CRF) on growth and yield of upland rice were investigated in upland rice. As with the initial research, nitrogen (N) treatments were applied as CRF treatments; T2H (30 kg N ha−1), T3H (60 kg N ha−1), T4H (90 kg N ha−1), T5H (120 kg N ha−1) and recommended dose of fertilizer (RDF) at 120 kg N ha−1 RDF (T6U) in split application and T1 (0 N) as control. Results from this study indicated that applying CRF at the optimum N rate, T4H resulted in maximum grain yield, increasing by 71%. The analysis of yield components revealed that higher grain yield in T4H CRF was associated with an increase in panicle number and number of grains per panicle. Maximum grain N uptake of 0.25 g kg−1 was also observed in T4H CRF. In addition, T4H CRF recorded the highest harvest index (HI) and N harvest index (NHI) of 45.5% and 67.9%, respectively. Application of T4H CRF also recorded the highest N use efficiency (NUE) and N agronomic efficiency (NAE), 52.6% and 12.8 kg kg−1, respectively. Observations show that CRF with only 75% N applied (T4H) in soil improved grain yield when compared to CRF with 100% N and 100% RDF in farmers’ conventional split application. This suggested that CRF with a moderate N application might produce the highest potential yield and improved N efficiencies while enhancing crop production and further increase in N supply did not increase yield and N efficiencies. The results suggest that the application of T4H CRF for upland rice would enhance HI, N efficiencies and improve the yield of upland rice. Also, all growth parameters and yield were positively influenced by the application of CRF as a basal dose compared to split application of conventional urea fertilizers.