Soybean (Glycine max [L.] Merr.) fixes atmospheric nitrogen through a symbiotic relationship with rhizobia in root nodules to produce allantoin and allantoic acid. These ureides serve as primary nitrogen transport compounds moved from nodules to shoot in support of physiological functions and organ growth. Nodule ureide permease 1 (UPS1) is important for this transport process. Drought stress inhibits nitrogen fixation and reduces productivity in soybean, which has been associated with the accumulation of ureides in both nodule and shoot tissues. In this study, it was hypothesized that changes in ureide nodule-to-leaf-to-sink partitioning through manipulation of UPS1 function would alter ureide tissue levels, ultimately influencing soybean responses to drought stress. Soybean plants overexpressing UPS1 (UPS1-OE) were exposed to moderate and severe drought conditions. Changes in organ and phloem ureide levels indicated enhanced nodule-to-shoot ureide transport and increased sink nitrogen supply in the transgenic versus control wild-type plants. We further uncovered improvements in carbon fixation, partitioning and availability for nitrogen fixation, resulting in increased nitrogen gains and better growth of the drought-stressed UPS1-OE lines. Overall, our findings demonstrate that enhanced ureide partitioning not only contributes to improved soybean performance under well-watered conditions, but also under drought stress.