We conducted field experiment to investigate the effect of lime-nitrogen on nitrification and N₂O emission in fertilized soils, and soil incubation experiment was also conducted for further analysis of lime-nitrogen effect. We compared four nitrogen fertilizer treatments: CF (chemical fertilizer), LN100 (application of all N fertilizer as lime-nitrogen), LN50 (application of 50% of N as lime-nitrogen and the remainder as chemical fertilizer), and CFD (chemical fertilizer with DCD) in a field experiment. In a soil incubation experiment, two nitrogen treatments were also studied: CF treatment and lime-nitrogen treatment. Soil nitrification activity was lower in the LN100, LN50, and CFD plots than in the CF plot. We found an apparent decrease in N₂O emission rate between 7 and 14 days after fertilization in the LN100, LN50, and CFD plots compared with that in the CF plot. This period of decrease in N₂O emission rate paralleled that when DCD was detected in the topsoil layer of the former three plots. Moreover, correlation analysis suggested that the application of lime-nitrogen affects N₂O emission through controlling both the first (NH₄⁺ to NO₂⁻) and second (NO₂⁻ to NO₃⁻) soil nitrification reactions, whereas DCD blocks only the first nitrification reaction.