In order to study the effects of different levels of salt stress and nitrogen (N) on physiological mechanisms, carbon isotope discrimination (Δ13C), and yield of two wheat cultivars (cv.), a two-year field experiment was carried out during 2013–2015. The treatments included three levels of salt stress (1.3, 5.2, and 10.5 dS m–1), three levels of N (50, 100, and 150 kg N ha–1), and two wheat cultivars, Bam and Toos. Under salt stress, N application (100 and 150 kg N ha–1) produced a significant effect on both cultivars with respect to physiological traits, i.e., net photosynthetic rate (Pn), stomatal conductance (gs), chlorophyll index (CI), Na+/K+ ratio as well as the grain yield (GY). The salt-tolerant and -sensitive cultivars exhibited the maximum values of physio-biochemical and yield attributes at 100 and 150 kg N ha–1, respectively. The results of Δ13C showed a significant difference (P<0.001) between wheat cultivars under the control and salt stress. According to our result, salt-tolerant cultivar Bam seems to be more efficient in terms of higher GY, Pn, gs, CI, and lower Na+/K+ ratio as well as higher Δ13C as compared with salt-sensitive cultivar Toos, under salt stress. Therefore, a significant positive correlation that observed between Δ13C and GY, indicated that Δ13C may be an effective index for indirect selection of yield potential in wheat under irrigation regimes with saline water.