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Recycled paper pellets in the bottom of containers were evaluated for retention of N from container leachate. `Formosa' azalea were transplanted on 15 Apr. in 2.8-L containers in a pine bark/peat substrate (3:1; v/v). Treatments included paper (0 or 2.5 cm depth) in the bottom of containers and two rates of Osmocote 18–6–12 (0.68 kg or 1.36 kg N/yd3). Immediately after transplanting, plants were topdressed with 3.2 g of 12–4–6 fertilizer. Data collected included leachate samples every 2 weeks for NO3-N and NH4-N levels and destructive sampling every 4 weeks for shoot dry weight, foliar N, and total paper N. Nitrate-N and NH4-N leachate concentrations were reduced with the 0.68 kg N/yd3 fertilizer rate and with paper. For example, 28 days after planting (DAP) NO3-N leachate concentrations were reduced 36% with the 0.68 kg N/yd3 fertilizer rate and 46% with paper in the bottom of containers. NH4-N in the leachates was reduced 53% with the 0.68 kg N/yd3 fertilizer rate and 59% with paper. Azalea shoot dry weight was not affected by paper or fertilizer rate up to 112 DAP; however, as the study progressed, plants with paper in the bottom of containers grew larger than plants in no paper treatments (29% at 168 DAP, 31% at 196 DAP). Total N absorbed by paper was not affected by fertilizer rate, and peaked at 168 DAP [980 (0.68 kg N/yd3) to 1066 (1.36 kg N/yd3) mg per container, or 41% – 28% of applied N], after which it began to decline. This decline in paper N was associated with greater growth of azalea with paper.