Core Ideas: Intermediate wheatgrass is being bred as a perennial grain crop. Optimum N fertilizer rates for intermediate wheatgrass grain yields are reported. Intermediate wheatgrass biomass yield and quality is comparable to other biomass crops. Intermediate wheatgrass grain yields declined after two years of production. Lodging occurred at high N rates, which reduced grain yields. Perennial crops have fewer environmental impacts compared to annual crops, but there are no perennial grains available to replace the annual grains that occupy a majority of U.S. cropland. Here we report grain and biomass yields from an improved breeding population of intermediate wheatgrass (IWG) [Thinopyrum intermedium (Host) Buckworth & Dewey], a perennial grass being domesticated to serve as the first widely grown perennial grain crop. Our objective was to measure grain and biomass yields of this improved grain‐type IWG (TLI‐C2), a forage variety of IWG (cultivar Rush), and switchgrass (Panicum virgatum L.) in response to N fertilization rates ranging from 0 to 200 kg N ha⁻¹. TLI‐C2 grain yields responded quadratically to increasing N rates in all but one environment, but yields declined at high N rates due to lodging. TLI‐C2 grain yields were highest during the first year of fertilization, yielding 961 and 893 kg ha⁻¹ when fertilized at agronomically optimum nitrogen rates (AONRs) of 61 and 96 kg N ha⁻¹ for stands seeded in fall of 2011 and spring of 2012, respectively. Grain yields declined with stand age. When fertilized with AONRs for grain, biomass yields of TLI‐C2 harvested after grain ranged from 9.2 to 12.3 Mg ha⁻¹ and had similar forage and bioenergy quality characteristics compared to Rush, which demonstrates the potential to manage TLI‐C2 as a dual‐use cropping system for both grain and forage.