A two years (2014-15 and 2015-16) field experiment was performed to find out the effect of plastic film and straw mulching on yield, water use efficiency (WUE) of wheat (Triticum aestivum L.) and selected soil properties. There were three treatments i.e. control, plastic film and straw mulch. No mulch was added in control. Rice straw was applied on the surface at a rate of 5 Mg ha-1. Soil samples in 0-15 cm and 15-30 cm depths were taken and analyzed. Soil water contents at 20 cm interval every 7 days were determined in 0-160 cm soil depth before sowing, after harvesting and during growing seasons. Results showed that grain yield was increased significantly by 29.8 in 2014-15 and 35.6% in 2015-16 over that of control under straw mulch. Straw mulch also decreased total water use with an increase in WUE. Soil bulk density was decreased significantly with a significant increase in porosity, water stable aggregates, active carbon, organic matter and soil water contents after harvesting. Soil water storage was higher under straw mulch for most sampling times. In conclusion, mulching soil with straw can sustain wheat yield and improve WUE and soil properties.