Due to the importance of Mediterranean cypress in seedling production and forestation practices in dry and semi dry environments of the country, this research was carried out with the aim of investigating the response of Mediterranean cypress seedlings to moisture changes and nitrogen nutrition of the soil. For this purpose, 270 healthy and uniform seedlings of Cupressus horizontalis L. were prepared and examined under 6 soil moisture contents (100, 75, 50, 25, 15 and 10 percent of field capacity) and 3 levels of urea fertilizers, including control, low and high concentrations, respectively with 0, 75 and 150 mg/kg urea by using a two-way factorial experiment with 3 replicates based on randomized complete block design for 5 months (from May to November). The results showed that more than 82. 2% of seedlings survived up to 25% field capacity (FC) in control (no fertilizer) treatment. Survival of seedlings in 15% and 10% FC under the effect of urea fertilizer, especially under HN treatment, was gained 100% and 66. 7%, respectively. Regardless of urea, reduction of soil moisture content particularly in 50% and 25% FC decreased significantly the characteristics of stem length growth, biomass of different parts, quality index (QI) and physiological properties (photosynthetic area, relative water content and total chlorophyll) of seedlings. However, increase of urea fertilizer increased the survival, biomass of different parts of seedlings, physiological properties, WUE, total chlorophyll, and QI of seedlings. Therefore, it is suggested that in order to produce C. horizontalis seedlings, soil moisture content should not drop under 50% FC; Otherwise, the use of urea fertilizer is necessary with the aim of improving the growth, quality and water use efficiency of seedlings.