Azadirachta excelsa is a large commercial woody, multi-purpose, easy to grow in poor nutrient soil and drought resistant species. Study on effect of shading rate on growth and physiological indicators of Azadirachta excelsa in nursery stage will provide scientific basis for proposal of intensive sylviculture techniques for Azadirachta excelsa in the South Central dry land. The study results show that, in 1-3 month - age the seedlings are highest and largest diameter at shading rate of 50 percent, in 3 - 12 month - age the seedlings are highest and largest diameter at shading rate of 25 percent and no shading. At 12-month old Azadirachta excelsa leaf thickness is 242.17 um - 316.80 um (283.34 um on average), highest in formula of no shading. The top vascular and cuticle layers' thickness is from 23.56 um to 48.27 um and from 9,19 um to 15.17 um, respectively. The thickness of vascular and spongy tissues is 85.82 um - 101.25 um and 89.74 um - 111.41 um respectively, highest in the formula of 25 percent shaded. The number of stomata in the leaf down surface is from 50 to 84 per mm2, highest in formula of 25 percent shaded. Total chlorophyll content in the leaf is from 2.54 to 2.99 mg per one gram of fresh leaves. The proportion of dla/dlb is from 2.46 to 2.70. Evaporation intensity is from 1415 to 1920 umol per m2 per second, averaging 1635.8 umol per m2 per second, highest in the formula of no shading. Photosynthetic intensity ranges from 0.62 to 0.92 umol per m2 per second, highest in formula of 25 percent shaded. Azadirachta excelsa leaf is distorted at the temperature of 45°C, completely darkened and impossible to recover at the temperature of 60°C.