Grasslands are subject to a wide range of land management practices that influence the exchange of the three main agricultural greenhouse gases (GHGs) that are related to agriculture: carbon dioxide (CO2), nitrous oxide (N2O), and methane (CH4). Improving nitrogen fertilization management practices through the use of nitrification inhibitors (NIs) can reduce GHGs emissions. We conducted a field experiment at the Colombian Agricultural Research Corporation with four fertilization treatments: urea (typical fertilizer used in this region), ammonium sulfate nitrate (ASN), ASN plus the NI 3,4-dimethylpyrazole phosphate (ASN+DMPP), and an unfertilized control. The highest grassland yields (1956 and 2057 kg DM ha−1, respectively) and apparent fertilizer nitrogen recoveries (34% and 33%, respectively) were generated by the conventional urea fertilizer and ASN+DMPP. Furthermore, the use of ASN+DMPP reduced the N2O emissions that were related to N fertilization to the level of the unfertilized treatment (ca. 1.5 g N2O-N ha−1), with a significant reduction of N-yield-scaled N2O emissions (ca. 20 g N2O-N kg N uptake−1). These results support the application of DMPP as an alternative strategy to increase grassland yield while simultaneously reducing the environmental impact of N fertilization.