Biochar is an efficacious amendment for mitigating nitrous oxide (N2O) emissions in soils. Nevertheless, the underlying mechanisms responsible for reduced N2O emissions by biochar in paddy soils remain inadequately elucidated. Here, using two typical paddy soils with contrasting pH values (5.40 and 7.56), the N2 and N2O fluxes and the associated functional genes were investigated in soil amended with varying amounts of biochar (0%, 0.5%, and 5%, weight/weight) via soil slurry incubation integrated with the N2/Ar technique and qPCR analysis. The results showed that N2O fluxes were significantly (p < 0.05) reduced by 0.65–3.64 times following biochar amendment, concomitant with a significant (p < 0.05) increase in N2 fluxes (5.47–46.14%) in both acidic and alkaline paddy soils. As a result, the N2O/(N2O + N2) ratios were significantly (p < 0.05) reduced by 1.53–4.65 fold in both soil types. In acidic paddy soils, the enhanced denitrification rates and the decreased N2O/(N2O + N2) ratios exhibited a strong correlation with increased pH values. In alkaline paddy soil, these changes were ascribed to the enhanced nosZ Clade I gene abundance and nosZ/(nirS + nirK) ratio. Our findings reveal that biochar primarily mitigates N2O emissions in paddy soils by promoting its reduction to N2. Biochar promotes denitrification in acidic paddy soil by increasing soil pH and enhances the same process in alkaline paddy soil by increasing nosZ gene abundance, resulting in reduced N2O emissions.