In the high standard farmland construction in the plain river network areas, improving field drainage capacity for waterlogging reduction may increase drainage and the associated pollutants discharge to the receiving water bodies. So it is necessary to take controlled drainage (CD) measures to mitigate the adverse impact of crop production on the ecological environment. Based on a monitoring study on drainage and water quality processes conducted in the rice and wheat rotation fields in the Yanyun Irrigation District of Yangzhou, Jiangsu Province from 2021 to 2022, an analytical study by using the field hydrological model—DRAINMOD was presented to examine the impact of increasing drainage intensity and controlled drainage (CD) on rice field drainage, nitrogen losses, and irrigation demands based on long-term meteorological records. The simulation results showed that under the traditional drainage (TD) conditions, when the drainage spacing (L) was between 120m and 20m and the depth (D) was increased from 60cm to 120cm, the predicted drainage and total nitrogen (TN) losses were increased by 9.0%~22.2%, the ammonia nitrogen (NH3N) loss was increased by 4.0%~16.8%, and the irrigation demand was increased by 9.6%~23.4%. The increases in drainage, irrigation, and nitrogen losses were more pronounced when the drainage intensity was high. Considering the differences in drainage requirements during different periods of rice and wheat rotation, the aforementioned negative effects can be avoided with controlled drainage measures. Under the controlled drainage conditions, when the drainage spacing (L) was at 120~20m and the depth was at 60cm, the predicted drainage and TN losses were decreased by 12.0%~22.9%, NH3N loss was decreased by 3.4%~22.0%, and irrigation demand was decreased by 14.6%~28.5%. When the drainage depth was at 120cm, the predicted drainage and TN losses were decreased by 19.3%~35.3%, NH3N loss was decreased by 7.6%~27.2%, and irrigation demand was decreased by 22.9%~40.0%. For smaller drainage spacing, the water-saving and nitrogen reduction effect of CD was more significant. The controlled drainage changed the proportion of surface drainage to subsurface drainage. By restricting subsurface drainage, CD reduced the amount of subsurface drainage by 14% and 23% drainage for drainage depth at 60cm and 120cm. The results showed that controlled drainage in the rice and wheat rotation fields had very positive effect on irrigation water-saving, drainage and nitrogen reduction, which can effectively alleviate the negative impact of increasing drainage intensity to improve field drainage capacity. Findings from this research can provide theoretical basis and technical support for the construction of high standard farmland and water environment protection in the rice and wheat rotation areas.