We designed a new cultivation system of rice with circulated irrigation to remove nitrogen from treated municipal wastewater effectively and assessed the possibility of nitrogen removal in the new system without any adverse effects on rice production through bench-scale experiments through two seasons. Overgrowth of the rice plant, which can lead to lodging and tasteless rice, was found in the first season probably because nitrogen supply based on standard practice in normal paddy fields was too much in the closed irrigation system. In the second season, therefore, the amount of treated wastewater initially applied to the system was reduced but this resulted in a considerably decreased yield. On the other hand, the taste of the rice was significantly improved. The two-season experiments revealed that the new system enabled rice production with minimal irrigation (approximately 50% on the yield base compared to normal paddy fields) and no nitrogen fertilizer. The system also achieved >95% removal of nitrogen from the treated wastewater used for circulated irrigation. The accumulation of harmful metals in the rice was not observed after one season of cultivation in the new system. The accumulation after cultivation using the same soil repeatedly for a longer time should be examined by further studies.