Sheath blight, caused by the Rhizoctonia solani Kuhn is one of the most serious economic diseases of rice (Oryza sativa L.). Variety and nitrogen (N) fertilizer input are known to influence plant growth, sheath blight development and grain yield in intensive and high input rice production systems. This study was conducted to determine the sheath blight development in different high-yielding rice varieties and its association with yield loss across N rates. Six high-yielding rice varieties namely MR 84, MR 167, MR 185, MR 219, MR 220 and MR 232 established in Malaysia were grown under 0, 60, 120 and 180 kg N ha-1 in controlled condition. Inoculation of disease was done in each assigned inoculated pots to achieve uniform disease development. Plant height and the number of tillers in each pot were measured every 13 days for determination of plant growth pattern. Disease intensity was quantified by measuring relative lesion height (RLH) and sheath blight index of inoculated pots at 10 days after flowering. Morphological traits (plant height, number of tillers and leaf area index (LAI)), grain yield and yield loss from sheath blight were also measured. N fertilization significantly affected plant growth, morphological traits, sheath blight intensity, grain yield and yield loss from sheath blight. Maximum plant heights were produced by the rates at 180 kg N ha-1 and 120 kg N ha-1. Maximum number of tillers was produced by plants receiving 180 kg N ha-1 with of 19.61 tillers pot-1. The plant in experimental pots receiving 180 kg N ha-1 had significantly the highest LAI with mean of 6.56. RLH and sheath blight index were higher at 120 and 180 kg N ha-1. The N application at 180 kg N ha-1 gave significantly the maximum grain yield of 6022.0 kg ha-1. Higher yield loss was obtained by N rate of 180 kg N ha-1 (20.5 %) due to sheath blight disease. Variety of rice significantly affected morphological traits, sheath blight intensity, grain yield and yield loss from sheath blight. The interactive effect between N rate and variety showed significant differences for LAI and yield loss from sheath blight. The RLH showed significant positive correlation with number of tillers (r = 0.291) while sheath blight index showed significant positive correlation with LAI (r = 0.383). Among the six varieties, MR 167 had lower RLH (9.48 %) and sheath blight index (2.11) and consequently lower yield loss (10.7 %) from the disease. Sheath blight have an effect on grain yield where it reduced the rice grain yield by 12 to 21 % among N rates and from 11 to 22 % among different varieties and varied from 0 to 33 % for each variety across N rates. RLH had closer correlation with yield loss than sheath blight index. Disease intensity and yield loss from sheath blight increased as N rates increased, but the magnitude varied among varieties. In order to reduce the disease development and yield loss and also to maximize grain yield, an appropriate amount of N rates should be applied for different varieties with different plant types.