Asian cultivated rice (Oryza sativa L.) consists of two main subspecies, indica and japonica. Indica has higher nitrate-absorption activity than japonica, but the molecular mechanisms underlying that activity remain elusive. Here we show that variation in a nitrate-transporter gene, NRT1.1B (OsNPF6.5), may contribute to this divergence in nitrate use. Phylogenetic analysis revealed that NRT1.1B diverges between indica and japonica. NRT1.1B-indica variation was associated with enhanced nitrate uptake and root-to-shoot transport and upregulated expression of nitrate-responsive genes. The selection signature of NRT1.1B-indica suggests that nitrate-use divergence occurred during rice domestication. Notably, field tests with near-isogenic and transgenic lines confirmed that the japonica variety carrying the NRT1.1B-indica allele had significantly improved grain yield and nitrogen-use efficiency (NUE) compared to the variety without that allele. Our results show that variation in NRT1.1B largely explains nitrate-use divergence between indica and japonica and that NRT1.1B-indica can potentially improve the NUE of japonica.