Abstract Nitrogen fixation (NF) in soybean (Glycine max L. Merr.) is highly sensitive to soil drying. This sensitivity has been related to an accumulation of nitrogen compounds, either in shoots or in nodules, and a nodular carbon flux shortage under drought. To assess the relative importance of carbon and nitrogen status on NF regulation, the responses to the early stages of drought were monitored with two soybean cultivars with known contrasting tolerance to drought. In the sensitive cultivar (‘Biloxi’), NF inhibition occurred earlier and was more dramatic than in the tolerant cultivar (‘Jackson’). The carbon flux to bacteroids was also more affected in ‘Biloxi’ than in ‘Jackson’, due to an earlier inhibition of sucrose synthase activity and a larger decrease of malate concentration in the former. Drought provoked ureide accumulation in nodules of both cultivars, but this accumulation was higher and occurred earlier in ‘Biloxi’. However, at this early stage of drought, there was no accumulation of ureides in the leaves of either cultivar. These results indicate that a combination of both reduced carbon flux and nitrogen accumulation in nodules, but not in shoots, is involved in the inhibition of NF in soybean under early drought.