The objective of this study was to investigate varietal differences in dry matter production and physiological nitrogen use efficiency (PNUE) using a wide range of rice (Oryza sative L.) varieties at an early growth stage. The results provide useful information for breeding suitable varieties for cultivation under conditions of low soil fertility or with reduced fertilizer use for sustainable agriculture. Thirty-one rice varieties were used, and seedlings were grown under 8 nitrogen treatment conditions. The effects of natural variations in embryo and/or endosperm size on initial growth were controlled for by comparing the relative dry weight (RDW) of nitrogen-treated samples and controls. The rice varieties were classified into 5 groups by cluster analysis. Overall, the present study found that there are wide variations in PNUE among varieties with similar levels of RDW under varying nitrogen conditions. Variations in PNUE were greater under lower nitrogen conditions; in contrast, variations in RDW were greater under higher nitrogen conditions. These data, along with those of other studies, indicate differences in nitrogen use efficiency between Indica- and Japonica-types, upland and lowland varieties, and landraces and improved types.