From the seedling stage, N98S/Teqing, a two-line hybrid rice, exhibited heterosis in morphological and physiological characters.In yield components,the panicles per mu and filled grains per panicle of this hybrid rice showed 10. 52% and 31. 25% mid-parent heterosis respectively. It also presented heterosis over HuaYougui 44, a check strain of three-line indica hybrid rice , in panicles per mu by 15. 92% and 1000-grain weight by 5. 22%. The theoretical yield showed 11% heterobeltosis and 19. 26% standard heterosis. proving that N98S/ Teqing has a potential for increased yield.