The objective of this study was to explore a technique to increase and maintain soil moisture of dryland through subsoiling during fallow period (SS) and the proper nitrogen (N) application in wheat production. In a two-year field experiment carried out in Wenxi County of Shanxi Province, China from autumn 2009 to summer 2011, we tested soil moistures in different soil layers, protein content and its components in grain, and activities of enzymes related to protein accumulation during grain filling after SS and non-tillage practice (CK) in combination with the applications of low (LN, 75 kg ha-1), medium (MN, 150 kg ha-1), or high (HN, 225 kg ha-1) N. Before sowing, the soil moistures in 0-300 cm soil layers under SS condition were higher than those under CK condition, especially in 60–160 cm soil layers, which were increased by 12%–34% in dry year and 10%–22% in humid year. Under SS condition, the activities of protein-related enzymes increased, such as glutamine synthetase (GS) in grain, glutamate synthase (GOGAT) in flag leaf, and GOGAT in grain in LN and MN treatments, and glutamic acid-pyruvate transaminase (GPT) in grain. In mature grains, the globulin content and protein yield in SS treatment were increased compared with CK, and Glutenin content and glutenin/gliadin ratio in humid year also increased in SS. The soil moisture in 20–200 cm soil layer at anthesis stage showed a decrease trend with the increase of nitrogen application level; however, the GS activity in grain, GOGAT activity in flag leaf at middle to late filling stage , GPT activity in grain at late filling stage were enhanced, and the contents of protein and its components in grain were increased. The glutenin/gliadin ratio in grain was the highest in MN treatment. Nitrogen application had obvious effects on soil moisture in the deep soil layer at anthesis, also on protein yield, GS and GPT activities in grain under SS condition. Under SS plus N application condition, soil moisture at anthesis was closely correlated with grain albumin, glutenin, and protein content in humid year and with glutenin/gliadin ratio in dry year. In conclusion, subsoiling during fallow period is an effective method to maintain soil moisture in dryland; N application at 225 kg ha-1 has a positive effect on increasing contents of grain protein and its components, whereas N level of 150 kg ha-1 is favorable for high protein yield and glutenin/gliadin ratio in grain in dry year.