Aims Indiscriminate application of conventional urea (CU) fertilizer in wheat (Triticum aestivum L.) production increases production costs, reduces nitrogen use efficiency (NUE), and contributes to elevated greenhouse gas emissions. This study investigated the potential of partial substitution of CU with nano urea (NU) to enhance wheat productivity, nitrogen (N) dynamics, economic returns, and environmental sustainability. Methods A field experiment was conducted using seven treatment combinations of CU and foliar-applied NU, in a Randomized Complete Block Design with three replications and BARI Gom-32 was used as the test crop. Results Partial substitution of CU with NU substantially improved agronomic attributes and N uptake relative to sole application of CU. Replacement of 16% CU with one foliar spray of NU (T3) exhibited a notable increase in the total number of tillers m-2, grain yield, protein content, grain N content, straw N status, NUE, and total N uptake by 12%, 7-8%, 6%, 5%, 2%, 135%, and 4%, respectively, compared with farmers practice (FP). Economic analysis revealed that T2 performed similarly to T3, however T3 generated the highest gross returns (1014 $ ha-1), net profit (304 $ ha-1), and benefit-cost ratio (BCR) (1.42). Furthermore, a 16% replacement of N (9,300 tons) could potentially reduce 46,128 tons CO2 equivalent emissions and 448,826 Gigajoules (GJ) of energy annually relative to FP. Conclusions Nano urea-mediated partial substitution of CU can strengthen wheat productivity, farm profitability, and environmental sustainability.