Biochar-based controlled release nitrogen fertilizers (BCRNFs) have received increasing attention due to their ability to improve nitrogen-use efficiency (NUE) and increase crop yields. We previously developed a novel BCRNF, but its effects on soil microbes, NUE, and crop yields have not been reported. Therefore, we designed a pot experiment with five randomised treatments: CK (without urea and biochar), B (addition biochar without urea), B + U (biochar mixed urea), Urea (addition urea without biochar), and BCRNF (addition BCRNF), to investigate the effects of BCRNF on nitrifiers and denitrifiers, and how these impact nitrogen supply and NUE. Results of high-throughput sequencing revealed bacterial community groups with higher nutrient metabolic cycling ability under BCRNF treatment during harvest stage. Compared to Urea treatment, BCRNF treatment stimulated nitrification by increasing the copy number of the bacterial amoA gene and reducing nitrous oxide emission by limiting the abundance of nirS and nirK. Eventually, BCRNF successfully enhanced the yield (~ 16.6%) and NUE (~ 58.79%) of rape by slowly releasing N and modulating the abundance of functional microbes through increased soil nitrification and reduced denitrification, as compared with Urea treatment. BCRNF significantly improved soil NO3-, leading to an increase in N uptake by rape and NUE, thereby promoting rape growth and increasing grain yield.