Azolla is a common green manure used in paddy soils in eastern and southern China. Its effect on the growth of rice plant and the physical properties of soil was studied both in field experiment and pot culture. Results revealed that the contribution of available nitrogen from Azolla was lower than that of milk vetch but rather higher than compost. Azolla as a green manure,however,accumulated more organic matter in soils than the milk vetch and consequently manifestf}d more favourable effect on the improvement of soil physical properties in well drained conditions. Through two years observation,it was found that the rate of decomposition of Azolla in soils was comparatively slower than milk vetch and rice straw. But A.zolla,as well as other manures,gave no effects on the improvement of permeability in poorly drained paddy soils.