On a global scale, irrigated agriculture consumes about 72% of available fresh water resources. Deficit irrigation can be applied in the field to save irrigation water and still have acceptable crop production. Poor soil fertility and erratic rainfall are the major constraints to sustainable agricultural productivity. The AquaCrop model is a new model that is accurate, robust and requires fewer data inputs compared with the other models. The purpose of this study was to sensitivity analysis of AquaCrop model and to simulate grain yield, biomass, water use efficiency and actual crop evapotrairation for soybean. A field line source sprinkler irrigation system was conducted under full and deficit irrigation using different nitrogen fertilizer applications during two cropping seasons for soybean at Gorgan province in Iran. The simulation results showed a reasonably accurate prediction of grain yield and biomass in all cases. The simulated pattern of biomass accumulation and grain yield over time was close to mea sured values, with Willmott’s index of agreement for all the cases be ing ?0.95 for biomass and grain yield. The optimization can be made to determine maximum WUE. For example, the amount of irrigation water to achieve optimum WUE was equal to 200 and 275 mm for the first and second year of study, respectively. The ET c was estimated using AquaCrop model and it closely corresponded with the measured values ( 23% error). The simulated soil moisture data can be used in subsequent studies to develop a drought indicator for agricultural drought monitoring. AquaCrop model can be valu able tool in water and nitrogen management. Keywords: AquaCrop model, soybean, deficit irrigation, nitrogen application, soil moisture line source, water use efficiency.