Cadmium (Cd) pollution leads to soil degradation, decreases crop yield and affects human health through the food chain. Iron-modified woody peat (IMP) is an organic passivation material that significantly affects the migration of heavy metals in soil. Nitrification inhibitors are widely used to reduce greenhouse gas emissions. This study investigated the effects of the IMP and nitrification inhibitors dicyandiamide (DCD) and 3, 4-dimethylpyrazole phosphate on Cd content and form, crop yield, nitrous oxide (N2O) emission and bacterial communities in soil-lettuce systems. The simultaneous additions of IMP and DCD substantially reduced the soil available Cd content by 22.6 % and significantly promoted the lettuce yield by 42.9 %. Lettuce yield was significantly and negatively correlated with soil available Cd (correlation coefficient = −0.52). The simultaneous applications of IMP and nitrification inhibitors stimulated N2O emission risk by enhancing the soil NH4+-N contents and the relative abundances of Firmicutes, which could also decrease soil bacterial community stabilities. Therefore, tradeoffs among yield, Cd bioavailability, N2O emission and bacterial community stability should be comprehensively considered when evaluating the combined performances of IMP and nitrification inhibitors.