Nitrogen (N) is an essential element associated with crop yield and its availability is largely controlled by microbially-mediated processes. The abundance of microbial functional genes (MFG) involved in N transformations can be influenced by agricultural practices and soil amendments. Biochar may alter microbial functional gene abundances through changing soil properties, thereby affecting N cycling and its availability to crops. The objective of this study was to assess the effects of wood biochar application on N retention and MFG under field settings. This was achieved by characterising soil labile N and their stable isotope compositions and by quantifying the gene abundance of nifH (nitrogen fixation), narG (nitrate reduction), nirS, nirK (nitrite reduction), nosZ (nitrous oxide reduction), and bacterial and archeal amoA (ammonia oxidation). A wood-based biochar was applied to a macadamia orchard soil at rates of 10 t ha-1 (B10) and 30 t ha-1 (B30). The soil was sampled after 6 and 12 months. The abundance of narG in both B10 and B30 was lower than that of control at both sampling months. Canonical Correspondence Analysis showed that soil variables (including dissolved organic C, NO3--N and NH4+-N) and sampling time influenced MFG, but biochar did not directly impact on MFG. Twelve months after biochar application, NH4+-N concentrations had significantly decreased in both B10 (4.74 姠g-1) and B30 (5.49 姠g-1) compared to C10 (13.9 姠g-1) and C30 (17.9 姠g-1), whereas NO3--N concentrations increased significantly in B30 (24.7 姠g-1) compared to B10 (12.7 姠g-1) and control plots (6.18 姠g-1 and 7.97 姠g-1 in C10 and C30 respectively). At month 12, significant d15N of NO3--N depletion observed in B30 may have been caused by a marked increase in NO3--N availability and retention in those plots. Hence, it is probable that the N retention in high rate biochar plots was mediated primarily by abiotic factors.