Legume/non-legume intercropping is a widely applied agricultural practice worldwide and is very important for the development of sustainable agriculture, especially for improving soil nitrogen (N) nutrients and reducing N application via biological N fixation by legumes. However, research on intercropping between rice and aquatic legumes has rarely been undertaken. To address this issue, a field experiment was conducted to investigate the apparent N balance in rice and water mimosa (Neptunia oleracea Lour.) intercropping systems. Planting pattern treatments, including rice monocropping and rice/water mimosa intercropping, were employed in the paddy field, and three N fertilizer application levels, zero N (ZN, 0 kg ha−1 N), reduced N (RN, 140 kg ha−1 N), and conventional N (CN, 180 kg ha−1 N), were applied for the two planting patterns. The results showed that compared with rice monocropping, the growth indicators of rice were higher in the rice/water mimosa intercropping system. N fertilizer facilitated rice growth, and water mimosa grew better but reduced the partial factor productivity of rice. Notably, the biological N fixation efficiency of water mimosa was the highest in the reduced N treatment. In addition, the soil N nutrients in the rice/water mimosa intercropping treatments were higher than those in the rice monocropping treatments. In contrast, apparent N loss in the monocropping treatments was higher than that in the intercropping treatments, and it also increased with more N fertilizer applied. Thus, intercropping with water mimosa could promote rice growth, enhance N input, improve soil N nutrients, and reduce N loss. Furthermore, based on the performance of rice monocropping treatment under the conventional N level and rice/water mimosa intercropping treatment under the reduced N level on crop growth, N fixation, soil N nutrients, N mineralization and loss, we suggest thatrice/water mimosa intercropping with a reduced N application level is a much better choice. Taken together, rice/water mimosa intercropping is an environmentally friendly practice that could decrease N fertilizer application, and may alleviate nonpoint source pollution in paddy fields.