This experiment was conducted to evaluate the effect of split application of nitrogen(N) on development of vascular bundle(VB) and yield components of rice. Two cultivars were used in this study; IR58, an indica type and Shinunbongbyeim a japonica type. The number and total cross sectional area of the VB in the peduncle and leaf blade were more and bigger in N split application than 100 percent basal fertilizer. Nitrogen split application at necknode differentiation stage increased the number and size of the VB. Nitrogen split application resulted in increased panicle number with application of N before transplanting and at tillering stage; increased spikelets number with N application at necknode differentiation stage; and increased spikelet fertility and 1000 grain weight with N application at necknode differentiation and heading stages. Grain yield increased 7-10% in N split as compared to all basal application. The total cross sectional area of VB in peduncle closely correlated with the number of spikelets per panicle. Nitrogen management can have an impact on spikelet differentiation through more and bigger VB and increase grain yield potential.