<p>To establish suitable selection criteria for enhancing nitrogen use efficiency (NUE) in wheat, thirty varieties were field-tested under nitrogen-rich (N⁺) and nitrogen-deficient (N⁰) conditions at the University of Agriculture, Peshawar, Pakistan, during the 2013–14 season. A two-step association analysis was employed to identify key physiological traits related to NUE and its components in the first step. In the second step, the analysis explored the relationships among these important physiological traits and field-measured yield traits, followed by path coefficient analysis to validate the correlation results. The first step revealed a strong positive association between nitrogen uptake per grain and both nitrogen uptake efficiency and NUE under both N⁺ and N⁰ conditions, with a particularly strong relationship to nitrogen utilization efficiency under N⁰. Additionally, the nitrogen harvest index demonstrated a strong positive correlation with nitrogen utilization efficiency and NUE across both N⁺ and N⁰ conditions. In the second step, correlation analysis indicated that nitrogen uptake per grain and the nitrogen harvest index had strong positive associations with tillers m⁻² under both N⁺ and N⁰, as well as with thousand grains weight under N⁺ conditions only. Furthermore, path analysis identified tillers m⁻², grains spike⁻¹, and thousand grains weight as key traits that could serve as selection criteria for improving NUE.</p>