To improve the nitrogen utilization efficiency and a series of environmental problems caused by excessive application of nitrogen fertilizer, actual agricultural production often reduced the usage ratio of nitrogen fertilizer. However, the reduction in nitrogen fertilizer not only affects the soil microenvironment but also leads to adverse effects on rice yield. Due to its unique properties, biochar can regulate soil nutrient distribution and significantly affect soil microbial community structure/functions. To further understand the effects of different levels of biochar on soil nutrient indicators, soil microorganisms and crop growth under the nitrogen-reduction condition, our experiment with four groups was set up as followed: 0%, 2.5% and 5% biochar application rates with 99kg/hm2 nitrogen fertilizer and one control group (the actual fertilizer standard used in the field:110kg/hm2) without no exogenous biochar supplement. The rice yield and soil nutrient indexes were observed, and the differences between groups were analyzed based on multiple comparisons. 16S ribosomal RNA and ITS sequencing were used to analyze the community structure of soil bacteria and fungi. Redundancy analysis was performed to obtain the correlation relationships between microbial community marker species, soil nutrient indexes, and rice yield. Path analysis was used to determine the mechanism by which soil nutrient indexes affect rice yield. The results showed that a higher application rate of biochar led to a significant increased trend in the soil pH, organic matter and total nitrogen content. In addition, a high concentration of biochar under nitrogen-reduction condition decreased the soil bacterial diversity but elevated the fungal diversity. Different concentrations of biochar resulted in these changes in the relative abundance of soil bacteria/fungi but did not alter the dominant species taxa. Taken together, appropriate usage for biochar under the nitrogen-reduction background could induce alteration in soil nutrient indicators, microbial communities and crop yields. These results provide a theoretical basis for exploring scientific, green and efficient fertilization strategies in the rice cultivation industry. Notably, the interaction relationship between rhizosphere microorganisms in rice and soil microbial taxa are not yet clear, so further research on its detailed effects on rice production is needed. In addition, the Kyoto Encyclopedia of Genes and Genomes pathway enrichment analysis for the physiological functions of the soil microbes could only predict the potential metabolic pathways. Therefore, the next-generation metagenome techonology might be performed to explore detailed metabolic differences and accurate taxa alteration at the "species" level.