Well-acclimatized nitrifiers in high-nitrate agricultural soils can quickly nitrify NH4+ into NO3− subject to leaching and denitrifying loss. A 120-day incubation experiment was conducted using a greenhouse soil to explore the fates of applied fertilizer N entering into seven soil N pools and to examine if green manure (as ryegrass) co-application can increase immobilization of the applied N into relatively stable N pools and thereby reduce NO3− accumulation and loss. We found that 87–92% of the applied 15N-labelled NH4+ was rapidly recovered as NO3− since day 3 and only 2–4% as microbial biomass and soil organic matter (SOM), while ryegrass co-application significantly decreased its recovery as NO3− but enhanced its recovery as SOM (17%) at the end of incubation. The trade-off relationship between 15N recoveries in microbial biomass and SOM indicated that ryegrass co-application stabilized newly immobilized N via initial microbial uptake and later breakdown. Nevertheless, ryegrass application didn’t decrease soil total NO3− accumulation due to its own decay. Our results suggest that green manure co-application can increase immobilization of applied N into stable organic N via microbial turnover, but the quantity and quality of green manure should be well considered to reduce N release from itself.