Silver (Ag) is released from a range of products and accumulates in agricultural soils as silver sulfide (Ag2S) through the application of Ag-containing biosolids as a soil amendment. Although Ag2S is comparatively stable, its solubility increases with salinity, potentially altering its impacts on microbial communities due to the anti-microbial properties of Ag. In this study, we investigated the impacts of Ag on the microbially mediated N cycle in saline soils by examining the relationship between the (bio)availability of Ag2S and microbial functioning following the application of Ag2S-containing sludge. Synchrotron-based X-ray absorption spectroscopy (XAS) revealed that the Ag2S was stable within the soil, although extractable Ag concentrations increased up to 18-fold in soils with higher salinity. However, the extractable Ag accounted for <0.05% of the total Ag in all soils and had no impact on plant biomass or soil bacterial biomass. Interestingly, at high soil salinity, Ag2S significantly increased cumulative N2O emissions from 80.9 to 229.2 mg kg−1 dry soil (by 180%) compared to the corresponding control sludge treatment, which was ascribed to the increased abundance of nitrification and denitrification-related genes (amoA, nxrB, narG, napA, nirS, and nosZ) and increased relative abundance of denitrifiers (Rhodanobacter, Salinimicrobium, and Zunongwangia). Together, our findings show that the application of Ag2S-containing sludge to a saline soil can disrupt the N cycle and increase N2O emissions from agroecosystems.