Nitrous oxide (N₂O) emissions from paddy soils significantly contribute to global warming; however, the regulatory mechanisms of microbial denitrification remain poorly understood. This study investigated the biotic and abiotic drivers of N₂O production and reduction across seven paddy soils spanning China’s major rice-growing regions, using integrated qPCR, incubation experiments, and multivariate analyses. Results demonstrated niche partitioning among denitrifying microorganisms. Pearson correlation analysis demonstrated significant positive correlations between potential N₂O production rates and the abundances of denitrification genes (nirS, nirK, and fungal nirK), as well as between N₂O reduction rates and nosZ gene abundances (both clade I and II). Key soil chemical properties, including pH, total carbon (TC), and NH₄⁺-N content, showed significant relationships with both potential N₂O production rates and reduction rates. Furthermore, random forest analysis identified nirS, fungal nirK, TC, and pH as key predictors of N₂O production, while nosZ (clade I and II), TC, and pH governed N₂O reduction. Structural equation modeling revealed that nirS-type bacteria predominantly drove N₂O production, whereas nosZ II-encoded microorganisms primarily mediated N₂O reduction. Moreover, TC exhibited direct positive effects on both processes, while pH indirectly influenced N₂O production by regulating nirS abundance and affected reduction via nosZ Ⅱ modulation. These findings provide a mechanistic framework for mitigating agricultural denitrification-derived N₂O emissions through a targeted management of soil carbon and pH conditions to optimize complete denitrification.