In order to investigate the effects of plant density and nitrogen rates on physiological indices and yield of corn (var. SC704), a field experiment was conducted as split-plot arranged in a randomized complete block design with four replication in 1999 at Koushkak Agricultural Research Center of Shiraz University The treatments composed of nitrogen at four rates: 0, 80, 160 and 240 kgN/ha as main plots and plant density at four levels: 6, 7.4, 8.8, and to.2 plants/m2 as sub plots. Physiological indices was affected by N rates. Increasing N from 0 to 80 kg/ha considerably increased leaf area index. Increasing N from 0 to 80, and 160 kg/ha increased crop growth rate and leaf area index duration. Increasing N from 160 to 240 kgN/ha decreased crop growth rate. Among physiological indices, net assimilation rate was less affected by N application. Net assimilation rate declined during growth season. Increasing plant density, increased leaf area index, leaf area index duration and crop growth rate, but decreased net assimilation rate. Increasing leaf area index at field increased light interception and therfore increased photosynthesis capacity of plant that finally caused increased grain yield. The major increase in CGR under high plant density was due to increase of LAI. Considering the importance of LAI, CGR and LAID on grain yield it was concluded that the major increase in grain yield under high plant density was due to improvement of physiological indices.