Understanding P and N dynamics in manure-amended soil is essential for estimating the environmental impact of manure utilization in land applications. A laboratory incubation study was conducted to assess, (i) the effect of feeding a standard Australian commercial diet, and diets modified with phytase supplementation and reduced nonphytase phosphorus (NPP), on the concentrations of P and N (total and soluble) in the manure derived from layer hens (Gallus domesticus L.), and (ii) the change in water-soluble phoshorus (P(WSP)) and mineral N (NH(4)-N and NO(3)-N) when used as a soil amendment, applied at rates equivalent to 200 kg ha(-1) (200N) and 400 kg ha(-1) (400N). Phytase supplementation increased %P(WSP) by 8 to 12% in the manures, regardless of the levels of NPP in the diets, and in the manure-amended soils by 27 to 30% at the 200N application rate, and up to 54% at the 400N rate. Phytase significantly (P < 0.05) reduced total nitrogen (TN) content (by 12-31%) of the manures but generally produced greater nitrate accumulation in the manure-amended soils. Net nitrification, which commenced 4 wk after incubation, was accompanied by a simultaneous decrease in soil pH (by one pH unit) and a concomitant decline in %P(WSP). The decline in %P(WSP) was primarily attributed to P retention by the soil as it became more acidic. This study suggests that phytase addition not only reduces manure total N content, and increases water-soluble P, but its effects on manure total phosphorus (TP) and 2 mol L(-1) KCl extractable mineral N is influenced by the NPP level in the diet.