Applying slow-release nitrogen (N) fertilizers (SRNF) can simplify fertilization and enhance yield and N use efficiency (NUE) relative to conventional N fertilizer (CNF) application in rice cultivation. Nevertheless, the effect of SRNF on rice yield and NUE in the rice-crayfish (Procambarus clarkii) integrated system (RCIS) remains poorly understood. We conducted a field experiment to analyze the differences in soil nutrient status, rice canopy photosynthetic characteristics, biomass, grain yield and NUE between SRNF and CNF application (applied at levels of 90, 180 and 270 kg N ha^–1) in a RCIS in Yangzhou, China, from 2021 to 2022. Our results showed that SRNF application in the RCIS significantly increased canopy photosynthetic characteristics, shoot biomass and grain yield of rice in 2021 and 2022, compared to CNF application. Applying SRNF increased rice grain yield by 8.8 and 3.0% in 2021 and 2022, respectively, averaged across all N levels. However, SRNF applied at a level of 270 kg N ha^–1 significantly reduced rice grain yield by 6.1 and 4.0% in 2021 and 2022, respectively, compared with that of 180 kg N ha^–1. The increased rice grain yield with SRNF application was due to higher leaf N content, plant N content, N uptake, and soil available N content than those under CNF application in the RCIS. Moreover, a 44.3–50.7% reduction in the N level was achieved without rice yield loss via the enhanced NUE with SRNF instead of CNF in the RCIS. In conclusion, the findings of this study showed that SRNF application at moderate N level (105–118 kg N ha^–1) could enhance grain yield and NUE, and achieve rice N reduction in the RCIS.