Abstract: Excessive nitrogen (N) fertilizer input is common in rice production, whereas reducing N alone often leads to insufficient N supply during the middle and late growth stages and consequently yield penalties. Magnesium (Mg), the central element of chlorophyll, is involved in energy metabolism and assimilate transport, and may therefore help maintain yield and improve nutrient use efficiency under reduced–N conditions. To clarify the effects of reduced N combined with Mg application on rice growth and nutrient utilization, a two–year field experiment was conducted in the Chaohu Lake Basin from 2024 to 2025. Five treatments were established: CK (no N application), HN (high N application), HNMg (high N combined with Mg application), LN (low N application), and LNMg (low N combined with Mg application). This study evaluated the effects of Mg topdressing under reduced–N conditions on growth dynamics across the entire growing season, aboveground dry matter production, nitrogen and magnesium accumulation and partitioning, grain yield and its components, nitrogen–use efficiency, and economic returns. The results showed that Mg application significantly increased leaf SPAD values after heading, promoted continuous aboveground dry matter accumulation, and enhanced the partitioning of N and Mg to grain, with these effects being more pronounced under low–N conditions. Averaged across the two years, grain yield was highest under the LNMg treatment, which increased significantly by 11.65% and 15.00% compared with HN and LN, respectively. Meanwhile, compared with the other N–fertilized treatments, LNMg significantly increased apparent N recovery efficiency, agronomic N–use efficiency, and partial factor productivity of applied N by 28.37%–68.34%, 41.6%–470.97%, and 27.55%–51.60%, respectively. Moreover, although production cost increased only slightly (by approximately 4.06%), LNMg achieved the highest net return. Overall, the combination of moderate N reduction (180 kg N ha^-1) with Mg application (18 kg Mg ha^-1) enabled stable yield, improved N–use efficiency, and greater economic benefits in rice production in the Chaohu Lake Basin. This practice therefore represents a feasible strategy for greener and more efficient fertilization management in the region.