The effect on sugar beets of water and nitrogen movement in the soil under different water conditions was assessed over two years (2000-1) at the Khorasan Agricultural Research Center. Three water treatments (no water stress, continuous stress and primary stress) and three N amounts (80, 160 and 240 kg N/ha) were investigated. The amount of moisture depletion in the water treatments was 50%, 80% and 90%, respectively. The leaching estimation and chemistry model (LEACHM) is a process-based model developed by Hutson and Wagenet (1992) that describes water and solute movement, transformation, plant uptake and chemical reactions in unsaturated soils. The model applies numerical techniques to the Richard’s water flow equation and the convection dispersion equation (CDE) using finite difference methods. The LEACHM model contains four modules: LEACH-W simulates only the water regime, LEACH-N simulates nitrogen transport and transformation, LEACH-P simulates the pesticide displacement and degration, LEACH-C simulates the transient movement of inorganic ions. LEACH-N, the version of LEACHM that addresses N dynamics, was selected for this study because it has subroutines to calculate water flow, NO3 leaching, evapotranspiration, heat flow, rate content adjustments for temperature and water content, N transformations and uptake. Mineralization, nitrification, denitrification and volatilization are the major N transformation processes modeled by LEACH-N. The model predicted the amounts of moisture, ammonium and nitrate in the soil with acceptable precision. The correlation between the measured and predicted amounts was significant at the 1% level. Immediately after the application of N, the amounts of ammonium and nitrate in the surface layers increased sharply. The amount of ammonium in the surface layers was less for the non-stress treatment than the other treatments. Ammonium and nitrate uptake decreased at the time of stress, but increased after stress. By increasing the soil depth, the amount of nitrate in the non-stress treatment increased. In stress treatments, the amount of N losses caused by ammonium volatilization, denitrification and nitrate leaching decreased.