Land application of compost has been a promising remediation strategy for soil health and environmental quality, but substantial emissions of greenhouse gases, especially N2O, need to be controlled during making and using compost of high N-load wastes, such as chicken manure. Biochar as a bulking agent for composting has been proposed as a novel approach to solve this issue, due to large surface area and porosity, and thus high ion exchange and adsorption capacity. Here, we compared the impacts of biochar-chicken manure co-compost (BM) and chicken manure compost (M) on soil biological properties and processes in a 120-d microcosm experiment at the soil moisture of 60% water-filled pore space. Our results showed that BM and M addition significantly enhanced soil total C and N, inorganic and KCl-extractable organic N, microbial biomass C and N, cellulase enzyme activity, abundance of N2O-producing bacteria and fungi, and gas emissions of N2O and CO2. However, compared to the M treatment, BM significantly reduced soil CO2 and N2O emissions by 35% and 27%, respectively, over the experimental period. The 15N-N2O site preference, i.e., difference between 15N-N2O in the center position (δ15Nα) and the end position (δ15Nβ), was ~17‰ for M and ~26‰ for BM during the first week of incubation, suggesting that BM suppressed N2O from bacterial denitrification and/or nitrifier denitrification. This inference was well aligned with the observation that soil glucosaminidase activity and nirK gene abundance were lower in BM than M treatment. Further, soil peroxidase activity was greater in BM than M treatment, implying soil organic C was more stable in BM treatment. Our data demonstrated that the biochar-chicken manure co-compost could substantially reduce soil N2O emissions compared to chicken manure compost, via controls on soil organic C stabilization and the activities of microbial functional groups, especially bacterial denitrifiers.