Deposition of atmospheric inorganic and organic nitrogen (N) may increase soil nitrous oxide (N2O) emissions. To simulate and quantify such effects in forest ecosystems, understory N application, usually directly to the soil surface, has been used. However, this approach overlooks N interception by forest canopies, resulting in overestimates of actual impacts from N deposition. To test our assumptions, we monitored soil N2O emissions over one year in a Moso bamboo (Phyllostachys edulis) forest using different N deposition simulation approaches (canopy vs. understory application) and forms of N (inorganic vs. organic N). Our results revealed that cumulative N2O emissions from understory N application treatments were 20–50% higher than the corresponding canopy treatments, with greater N2O emissions under inorganic N than organic N application. Our study underscores the importance of considering canopy processes in future studies on N deposition and soil N2O emissions.