Biochar production and subsequent soil incorporation could provide carbon farming solutions to global climate change and escalating food demand. There is evidence that biochar amendment causes fundamental changes in soil nutrient cycles, often resulting in marked increases in crop production, particularly in acidic and in infertile soils with low soil organic matter contents, although comparable outcomes in temperate soils are variable. We offer insight into the mechanisms underlying these findings by focusing attention on the soil nitrogen (N) cycle, specifically on hitherto unmeasured processes of organic N cycling in arable soils. We here investigated the impacts of biochar addition on soil organic and inorganic N pools and on gross transformation rates of both pools in a biochar field trial on arable land (Chernozem) in Traismauer, Lower Austria. We found that biochar increased total soil organic carbon but decreased the extractable organic C pool and soil nitrate. While gross rates of organic N transformation processes were reduced by 50–80%, gross N mineralization of organic N was not affected. In contrast, biochar promoted soil ammonia-oxidizer populations (bacterial and archaeal nitrifiers) and accelerated gross nitrification rates more than two-fold. Our findings indicate a de-coupling of the soil organic and inorganic N cycles, with a build-up of organic N, and deceleration of inorganic N release from this pool. The results therefore suggest that addition of inorganic fertilizer-N in combination with biochar could compensate for the reduction in organic N mineralization, with plants and microbes drawing on fertilizer-N for growth, in turn fuelling the belowground build-up of organic N. We conclude that combined addition of biochar with fertilizer-N may increase soil organic N in turn enhancing soil carbon sequestration and thereby could play a fundamental role in future soil management strategies.