Field experiments were conducted to evaluate the effects of eco-friendly organic matrix entrapped urea (OMEU) on growth, productivity, and yield of rice (Oryza sativa L. cv. Basmati) and soil enrichment in the paddy field at Rohtak (Haryana) located near Delhi. The OMEU prepared in granular form contained cow dung, rice bran (grain cover of Oryza sativa), powder of neem leaves (Azadirachta indica), and clay soil (diameter of particles < 0.02 mm) in 1:1:1:1 ratios and saresh (plant gum of Acacia sp.) as binder along with half of the recommended dose of commercially available soluble urea (free urea; FU). Single basal application of OMEU showed an increase in plant growth in terms of fresh and dry weights, root length, root, leaf and tiller numbers, soluble protein, total N and ammonium in leaves, productivity in terms of grain and straw yield, and nutritional and microbial activities of field soil over free form of urea and no fertilizer application. Nutritional status of rice grains was also improved over the free urea and no fertilizer controls. Our data indicate that OMEU, which is low cost and based on bio-degradable, non-toxic, and locally available agro-waste, can be attempted to replace the conventional use of soluble urea in rice.