Nitrogen is an essential nutrient element for all living organisms. Most non-legume plants absorb inorganic nitrogen compounds from soil, and then convert them into organic nitrogen utilized by plants. Nitrogen use effeciency (NUE) is therefore a key for productivity of crops. We found that mutations in the rice ABNORMAL CYTOKININ RESPONSE1 (ABC1) gene, encoding a ferredoxin-dependent glutamate synthase (Fd-GOGAT), cause severe defects in nitrogen utilization. We performed a genetic screen for abc1 repressor (are) mutants that partially rescue the nitrogen deficient phenotype of the abc1 mutant. Molecular genetics and biochemical studies suggest that these ARE genes regulate various aspects of nitrogen utilization and nutrition. Natural variations in ARE1, encoding a plastid-localized protein that is likely involved in regulating assimilation of nitrogen and carbon, is closely associated with grain yield and is selected during breeding. Moreover, we have identified a class of enhancers of are1 (ear) mutants in a large scale genetic screen. The EAR genes are presumably involved in transcriptional regulation and mRNA turnover. Collectively, functional characterization of ARE genes and EAR genes shed light on the regulatory mechanisms of nitrogen utilization and C/N balance in plants.