The increased use of urea as a nitrogen (N) fertilizer source in northern Idaho may require precautions to prevent potential losses via volatilization. The purpose of this study was to determine the effects of urea placement, water potential and time on volatilization losses of N in two northern Idaho soils under laboratory conditions maintained at 25°C. A completely randomized block factorial design with repeated measures [2 soils x 2 urea placement treatments x 4 soil water potentials x 3 replications‐measured at 0, 2, 4, 8, and 16 d] was utilized in this study. The two soils, a DeVoignes silt loam (fine silty, mixed nonacid, frigid Histic Humaquept) and a Santa silt loam (coarse silty, mixed, frigid Ochreptic Fragixeralf), were maintained at water potentials of ‐0.8, ‐2.0, ‐3.0 or ‐6.0 bars. Urea was either surface applied or incorporated into the soils at the rate of 200 kg/ha. Data were analyzed by SAS‐GLM and Omega squared (ω2) values were used to identify the impact of each main effect and interaction. The 4‐factor interaction of urea placement (NIT) x soil (SL) x water potential (WP) x time of incubation (IT), 4–3 factor interactions, 6–2 factor interactions and 4 main effects were found to be significant in this study. Due to the number of significant sources of variation, ω2values were used to assess their relative importance. The urea placement treatment accounted for 31.8% of the variation in this study as N losses after 16 d of incubation from the surface urea applications were 28.35% compared to 6.52% where urea was incorporated into the soil. The incubation time x urea placement interaction was the second most important factor and accounted for 21.98% of the observed variability. Volatilization losses were much greater at all incubation times in the surfaceapplied urea treatment when compared to incorporated urea. The differences in N lost by volatilization increased with time. Soil water potential also affected N volatilization as losses increased with increasing soil moisture levels. When the soil water content was not limiting, substantial volatilization occurred. This may be due to an increased urea hydrolysis rate as the moisture content increases. This study demonstrated that volatilization losses may be significant for surface applications of urea on some Idaho soils. To counter these losses incorporation of urea into the soil should be considered.