AbstractNitrous oxide (N2O) is a potent greenhouse gas and is depleting the stratospheric ozone layer. Diazotrophic N2O assimilation to biomass represents a novel biological N2O consumption pathway in addition to canonical denitrification. Thermodynamically, N2O assimilation is more favorable than dinitrogen (N2) fixation in natural environments, especially under higher N2O concentration and cooler conditions. Via isotopic tracing experiments, N2O assimilation was detected on cultured diazotrophs Crocosphaera and Trichodesmium with specific rates from 1.27 ± 0.16 × 10−4 to 2.00 ± 0.25 × 10−4 hr−1 under elevated [N2O]/[N2] conditions (0.0005–0.01) within 24‐hr incubation. The rates of N2O assimilation during the light and dark periods were statistically insignificant compared with N2 fixation activity. In a eutrophic estuary, N2O assimilation was not detected in the absence of diazotrophic activity. A competitive substrate kinetic model with experimentally calibrated parameters successfully quantified rate ratios of N2O assimilation and N2 fixation in varying substrate concentrations. The low [N2O]/[N2] ratio in natural conditions leads to N2O assimilation rate being <0.1% of N2 fixation rate, rendering negligible impact of N2O assimilation. The model was also used to predict the time required for experimental detection of N2O assimilation in isotopic tracing experiments under varying [N2O]/[N2] ratios. This study enhances the mechanistic understanding of N2O assimilation by diazotrophs, broadening the microbial nitrogen cycle by a potential N2O sink and nitrogen source for production.