Whilst many experiments were carried out on utilising different sources of nitrogen for flue-cured tobacco ( Nicotiana tabacum L.) in temperate and sub tropical regions, little work is carried out in tropical zones, more so, under irrigated conditions. Urea so far is studied only as a source of nitrogen, but never looked into as a cost saving tool and also with a myth of producing poor quality tobacco under Indian conditions. However, increasing prices of fertiliser and other inputs necessitated the use of urea which is the cheapest source of nitrogen. A field experiment was conducted in two locations under irrigated loamy sand conditions of Northern Light Soils in Andhra Pradesh state of India during 1998-99 crop season, after obtaining encouraging results from the feeler trials conducted during 1996-98 crop seasons. The experiment was conducted with an objective to use as much 'Urea Nitrogen' in place of common, more expensive nitrogen sources like diammonium phosphate (DAP) and calcium ammonium nitrate (CAN). Treatments include several combinations of urea with DAP and CAN, both in basal and to dressing. Though no significant difference was observed in the cured leaf yield between different treatments, DAP applied as basal dressing (37.5%) and urea as top dressing (62.5%) has resulted in reducing the cost by 12% over normal practice of applying only DAP and CAN as nitrogen fertilisers as basal and top dressing (control) respectively. Chemical analysis results indicate 2.56% nicotine and 23.4% total sugars in the DAP + urea combination, whilst the control produced 3.2% nicotine and 22.0% total sugars. The physical characters, degree of maturity, the chemical quality with the use of urea will be discussed in detail in the paper. Urea, the cheapest source of nitrogen, which is easily available, could become one of the tools for cost reduction and help in producing 'value for money' tobacco without jeopardizing the quality.