Seedling (1-0) grading before transplanting is a new technique for transplanting (1-1) production. This technique can achieve efficient use of fertilization and high quality seedlings. Conventional method is to transplant seedlings into seedling bed without grading by sizes, which may cause growth differences and even seedling death induced by big seedlings suppressing the small ones. Transplanting seedlings after grading can cultivate more even sizes seedlings, save fertilizer, improve fertilizer use efficiency, and avoid seedling death. In this paper, we choose Larix olgensis Henry as study materials, tried to find out grading criteria for 1-0 seedling and their rational fertilization method. Then, transplanting according to different grades under various fertilizer treatments was carried out. Seedlings morphology, physiology and outplanting effects were measured. We determined the economic fertilization and rational fertilization methods based on national seedling standard and requirements of fast growing and high yield plantation, respectively. The main conclusions were as follows:(1) In 1-0 seedling cultivation stage, when the nitrogen application rate was 180 kg·hm-2, grade I seedling (diameter≥0.45cm) had maximum output; while nitrogen application rate were 60 and 120 kg·hm-2, gradeⅡ(0.39< diameter<0.45) and gradeⅢseedlings (0.30≤diameter<0.39) achieved maximum amount; grade IV seedlings (diameter<0.3cm) had the largest output when no nitrogen was applied.(2) 1-0 seedlings were graded by Principal Component Analysis and Cluster analysis. Diameter at the base, I grade lateral roots> 5cm and lateral roots>1cm were chosen as the seedling grading standards, which were translated to easily control indicators such as diameter and height.(3) When 1-1 seedlings were raised from graded 1-0 seedlings of four sizes, different amounts of fertilizer were needed to achieve the requirements of national seedling standard. GradeⅠseedlings did not need fertilization, gradeⅡ,Ⅲ,Ⅳseedlings needed P 32.8,32.8 and 65.5 kg·hm-2 respectively. To achieve higher seedling quality standard for fast growing and high yield plantation, GradeⅠandⅡseedlings needed N 120 kg·hm-2 and P 65.5 kg·hm-2 respectively, GradeⅢandⅣseedlings both needed N 120 kg·hm-2, but P 32.8 and 98.2 kg·hm-2 respectively. Seedling grading before transplanting was proved to be more efficient in fertilizer saving.(4) During the 1-1 seedling raising period, the nutrient use efficiency of gradeⅠandⅣ1-0 seedlings was less than that of gradeⅡandⅢseedlings. Nutrient use efficiency for N wasⅢ(21.0%)>Ⅱ(18.7%)>Ⅳ(11.0%)>Ⅰ(10.8%), for P wasⅢ(7.7%)>Ⅱ(6.7%)>Ⅰ(2.7%)>Ⅳ(2.3%). The results indicated that too large or too small 1-0 seedlings were not conducive to nutrient use efficiency.(5) Outplanting results showed that the survival rate was gradeⅡ>Ⅰ>Ⅲ>Ⅳfor 1-1 seedlings. The largest seedling did not reach the highest survival rate, while the smallest seedlings got the lowest survival rate (70%). It was suggested that gradeⅣseedlings should be discarded. Growth of height and diameter after one year of outplanting showed that gradeⅢ>Ⅱ>Ⅳ>Ⅰ, which indicating that the annual growth was poor for too large and too small initial seedling sizes, gradeⅠseedlings were even lower than grade IV seedlings.(6) By studying the growth, physiology and outplanting performance of 1-1 seedlings, it was concluded that gradeⅠseedlings was lower than gradeⅡandⅢseedlings in height, diameter and biomass, it did not perform well on nutrient use efficiency and survival rate. Therefore, gradeⅠ1-0 seedlings (height≥21.4 cm; diameter≥0.45 cm) could be used to outplanting directly. As gradeⅣ1-0 seedlings (14.2cm≤height≤18.6 cm; 0.25cm≤diameter≤0.33 cm) were poor on fertilizer use efficiency and survival rate, it should be discarded. We proposed that only using gradeⅡandⅢseedlings for transplanting. By doing so, it can eliminate the labor and material cost on gradeⅠand IV seedlings, improve fertilizer use efficiency, increase yield of qualified seedlings and ensure the field performance.