Biochar is a pyrolysed biomass and largely consists of pyrogenic carbon (C), which takes much longer to decompose compared to the biomass it is made from. When applied to soil, it could increase agricultural productivity through nutrient retention and changing soil properties. The biochar‐mediated nutrient retention capacity depends on the biochar properties, which change with time, and on soil properties. Here, we examined the effects of a wood biochar (20 t ha⁻¹), that has aged (21 months) in a grassland field, on gross nitrogen (N) mineralization (GNM) and ¹⁵N recovery using a ¹⁵N tracer. A field experiment was conducted in two soil types, that is a Tenosol and a Dermosol, and also included a phosphorus (P) addition treatment (1 kg ha⁻¹). Compared to the control, biochar with P addition significantly increased GNM in the Tenosol. Possibly, biochar and P addition enhanced nutrient availability in this nutrient‐limited soil, thereby stimulating microbial activity. In contrast, biochar addition reduced GNM in the Dermosol, possibly by protecting soil organic matter (SOM) from decomposition through sorption onto biochar surfaces and enhanced formation of organo‐mineral complexes in this soil that had a higher clay content (29% vs. 8% in the Tenosol). Compared to the control, biochar significantly increased total ¹⁵N recovery in the Tenosol (on average by 12%) and reduced leaching to subsurface soil layers (on average by 52%). Overall, ¹⁵N recovery was greater in the Dermosol (83%) than the Tenosol (63%), but was not affected by biochar or P. The increased N recovery with biochar addition in the sandy Tenosol may be due to retention at exchange sites on aged biochar, while such beneficial effects may not be visible in soils with higher clay content. Our results suggest that aged biochar may increase N use efficiency through reduced leaching or gaseous losses in sandy soils.