A greenhouse experiment was conducted in order to understand the adaptation responses to different water and N conditions, and further explore if additional N supply could improve the water-use efficiency (WUE) and adaptability of Sophora davidii seedlings under dry conditions. Two-month-old seedlings were subjected to a completely random design with three water (80, 40 and 20% water field capacity (FC)) and three N supply (N0: 0, Nl: 92 and Nh:184 mgNkg−1 soil) regimes. Drought stress dramatically decreased seedlings height, basal diameter, leaf number, leaf area,root length, and biomass production. An increase in below-ground biomass was observed indicating a higher root/shoot ratio (R/S) under drought stress conditions, and drought further decreased relative water content (RWC) and WUE. On the other hand, S. davidii seedlings exhibited strong responses to N supply, but the responses were inconsistent with the various N supply levels. Low N supply (Nl) increased seedlings height, basal diameter, leaf number, leaf area, and biomass production, but decreased root length. In contrast, high N supply (Nh) decreased or had little effect on these growth characteristics. N supply increased leaf percentages, but decreased fine root percentages. In addition, Nl rather than the other two N treatments increased leaf area ratio (LAR), leaf/fine root mass ratio (L/FR), R/S and RWC under severe drought stress (20% FC), even though these parameters could increase with the Nh treatment under well-watered condition (80% FC). Moreover, Nl also increased WUE under three water conditions, but Nh had little effect on WUE under drought stress conditions (40% FC and 20% FC). The results suggested that water and N co-limited the growth of S. davidii seedlings, and the seedlings exhibited great positive responses to Nl in this study. Appropriate or low N supply, therefore, would be recommended to stimulate growth, enhance WUE, alleviate drought stress, and consequently contribute to S. davidii seedling establishment under dry condition, but excess N supply should be avoided.