There are few reports on the effect of water content of substrate on the seedling quality and yield of machine-transplanted rice. In order to clarify the optimum water content of substrate, an experiment was conducted to study the effects of different water content of substrate(Water content is 40%, 60%, 80% and 100% respectively, which represented by W1, W2, W3 and W4 respectively)on the seedling quality and yield of machine-transplanted rice using Jiangzao 361 as material. The results showed that the water content of substrate had a significant influence on the seedling quality and yield of machine-transplanted rice. In the early season, the yield of EW2 treatment was the highest, which was significantly increased by 4.9%~5.9% than the other three treatments. The leaf age of EW2 treatment was significantly increased by 7.0% than EW1 and EW4 treatment, the plant height of EW2 treatment was significantly increased by 10.2% and 10.7% than EW3 and EW4 treatment, the dry weight per seedling of EW2 treatment was significantly increased by 6.8%~13.3%, compared with the other three treatments. The correlation analysis showed that the yield of early rice was significant positively correlated with grain number per ear. In the late season, the yield of LW2 treatment was the highest, which was significantly increased by 13.2% and 10.4% compared with LW1 and LW4 treatment. With the increase of water content of substrate, the leaf age, the plant height, the stalk and the dry weight per seedling were increased first and then reduced, LW2 treatment was the largest, the maximal value of 4 indexes were increased by 7.4%, 13.3%, 13.0% and 14.8%, respectively, compared with the minimum value. The correlation analysis showed that the yield of late rice was negatively correlated with the thousand seed weight. Under the condition of this experiment, the optimum water content of substrate is 60%, which is conducive to improving the quality of rice seedling and increasing the yield of machine-transplanted rice.