Straw returning is an important method of improving soil fertility and reducing environmental pollution. Controlled-release nitrogen fertilizer (CRN) is regarded as an effective way to reduce nitrogen (N) loss and increase N-use efficiency and crop yield. In order to determine the combined effects of straw management (straw removal and straw returning) and N-fertilization strategy (CK (no N), urea, CRN, and a mixture of urea and CRN (UC)) on lint yield, N utilization, and soil properties at harvest of field-seeded cotton, field experiments were conducted from 2018 to 2019. The results demonstrated that the lint yield was the highest with a combination of straw returning and UC, increasing by 4.2–46.9% over other combinations. Straw returning combined with UC facilitated biomass-accumulation and N-uptake from squaring to the boll-opening growth stage, contributing to higher N agronomic-use efficiency and apparent recovery-use efficiency. Moreover, regardless of the straw management, CRN or UC treatment increased the soil microbial N content and sucrase activity at harvest compared to urea or CK treatment. In summary, straw returning combined with UC was beneficial to the lint yield, N utilization, and soil N availability, which might be an optimizing strategy for field-seeded cotton.