Nitrous oxide (N2O) from nitrogen fertilizers applied to sugarcane has high environmental impact on ethanol production. This study aimed to determine the main microbial processes responsible for the N2O emissions from soil fertilized with different N sources, to identify options to mitigate N2O emissions, and to determine the impacts of the N sources on the soil microbiome. In a field experiment, nitrogen was applied as calcium nitrate, urea, urea with dicyandiamide or 3,4 dimethylpyrazone phosphate nitrification inhibitors (NIs), and urea coated with polymer and sulfur (PSCU). Urea caused the highest N2O emissions (1.7% of N applied) and PSCU did not reduce cumulative N2O emissions compared to urea. NIs reduced N2O emissions (95%) compared to urea and had emissions comparable to those of the control (no N). Similarly, calcium nitrate resulted in very low N2O emissions. Interestingly, N2O emissions were significantly correlated only with bacterial amoA, but not with denitrification gene (nirK, nirS, nosZ) abundances, suggesting that ammonia-oxidizing bacteria, via the nitrification pathway, were the main contributors to N2O emissions. Moreover, the treatments had little effect on microbial composition or diversity. We suggest nitrate-based fertilizers or the addition of NIs in NH4+-N based fertilizers as viable options for reducing N2O emissions in tropical soils and lessening the environmental impact of biofuel produced from sugarcane.