Hydrothermal carbonization aqueous phase (HAP) containing abundant organic matter (OM) and nutrients (e.g. N and P) are significant in soil nutrients retention capacity and have the potential to return to a paddy field to affect soil microbial diversity and enhance rice yield. In this study, a two-year micro-plot experiment was carried out in a paddy field with the application of cattle manure-derived HAPs prepared at 220 °C and 260 °C (CM220 and CM260) and kitchen waste- (vegetables) derived HAPs prepared at 220 °C and 260 °C (GV220 and GV260). After two-year cultivation, the results showed that soil NH4+-N, dissolved organic carbon (DOC), and available phosphorus (AP) significantly (P < 0.05) increased by 36.4–130.0%, 36.4–130.0%, and 47.8–82.6% but decrease soil pH by 0.43–0.87 units compared with CKU treatment. The HAPs treatments increased baterial richness (Chao 1) but decreased diversity (Shannon). CM260 and GV260 treatments were beneficial for the growth of Actinobacteria but unfavorable to the growth of Proteobacteria. Based on PICRUSt2 results, the abundance of functional genes involved in glucosidase (bglB and malZ), urease (ureC), nitrogen fixation (nifD), denitrification (nirK and nirB), and acid phosphate (phon) slightly increased in HAPs-treated soil and other functional genes were similar in all treatments. Importantly, all the HAP treatments increased the rice yield by 6.7–29.2% compared with the control treatment. The structure equation model (SEM) results demonstrated that soil NH4+-N (λ = 0.35) and DOC content (λ = 0.70) were the main driving factors of higher rice yield (P < 0.05). GV220 and GV260 treatments remarkably enhanced the grain N content by 6.5% compared with the control treatment (P < 0.05). These findings indicated that returning HAPs into paddy soil would not negatively affect soil health and improve soil structure and fertility. Overall, this study provides a new disposal way of green organic wastewater and emphasize the importance of microbial structure and composition for paddy field.