Sustainable nitrogen (N) management is critical for enhancing wheat production in the water-limited environment of China's Loess Plateau. This study investigated the effects of four N rates (0, 120, 180, and 240 kg N ha-1) and two sowing methods, furrow sowing (FS) and drill sowing (DS), on wheat yield, grain quality, and water-use efficiency (WUE). Results indicated that N application significantly improved all metrics. The optimal N rate for yield was 180 kg N ha-1 (N180), producing yields equivalent to the higher 240 kg N ha-1 rate (N240). Compared to the N0 control, the N240 treatment under FS in 2022-23 increased grain yield by 25.4% and WUE by 11.9%, while under DS it increased yield by 23.6% and WUE by 11.1%. However, in the following year (2023-24), the greatest benefits under FS came from N180, which increased yield by 19.3% and WUE by 11.5% over the control. Higher N rates markedly elevated grain quality: N240 resulted in the highest steamed bread score and concentration of volatile compounds. Nitrogen application also intensified soil water use, particularly before anthesis. In 2022-23, the highest N240 reduced soil water at maturity by 16.6% (FS) and 15.9% (DS) and increased total water consumption by up to 7.8% compared to N0. Yield was strongly correlated with soil water depletion in the 0-200 cm layer during the reproductive period. While N240 optimized quality, the N180 rate combined with improved sowing methods (FS or DS) provided the best balance, drill sowing was crucial agronomic practice for enhancing nitrogen-use efficiency (NUE), achieving high yield, superior WUE, and acceptable quality. We therefore recommend an N rate of 180 kg ha-1 with improved sowing as a sustainable practice for dryland wheat production on the Loess Plateau.