Biochar amendment has been proposed as a strategy to improve soil quality and mitigate climate change. Yet the extent and regulating mechanisms of soil nitrous oxide (N2O) emission in response to amendment of biochars derived from different feedstock have not been clearly demonstrated. A 12-month field trial was conducted to study the impact of two distinct biochar feedstocks (pine chip and peanut shell, at 10 and 30 t ha−1) with (+N) and without nitrogen (N) (−N) fertilization on soil N dynamics, N2O emissions, plant performance and microbial gene abundance. The cumulative N2O emissions varied greatly with biochar feedstock and application rate, and N fertilization. Pine biochar (at 30 t ha−1) significantly increased N2O emissions (by 48%) compared to control under −N, while peanut shell biochar (at 30 t ha−1) significantly increased N2O emissions (by 131%) compared to control under +N. Overall, biochar amendments had no impact on soil mineral N (NH4+ and NO3−) under both −N and +N. Under −N, biochar amendments showed no effect on plant yield, whereas under +N yield was significantly improved by 25–27% from pine biochar treatments. Under +N, only pine biochar (at 10 t ha−1) significantly increased plant N uptake (by 47%), and only peanut shell biochar (at 30 t ha−1) significantly enhanced soil AOB, narG, nirS and nosZ gene abundance. Increased soil N2O emission under −N from pine biochar amendment is likely to be regulated by improved water retention. However, increases in N2O emission from peanut shell biochar under +N could be driven by its large N inputs, labile organic C concentration and the increased soil pH which might largely facilitate biotic processes as evidenced by higher narG, nirS and AOB gene abundance. Positive feedback to N2O emission by biochar application revealed from this study is inconsistent with many current biochar studies, showing that caution should be exercised when considering use of biochar to mitigate N2O emission.