Although complexation between dissolved organic matter (DOM) and ubiquitous Fe is known to have a major influence on electron transferring ability in redoximorphic soil, it was unclear whether and how this complexation affected nitrate reduction and N2O productivity. The nitrate reduction of paddy soil in the presence of crop residues returning under flooding conditions was explored in this study. The rate of nitrate reduction in control soil was 0.0677 d−1, while it improved 1.99 times in treatment soil with Chinese milk vetch (CMV) straw returning. During a 28-day incubation period, N2O productivity decreased 0.08–0.91 ppb in CMV soil and 0.43–0.50 ppb in rice straw soil compared with control. The presence of crop residue increased DOC content and Fe (III) reduction rate, which aided in the formation of Fe (II)-DOC complexation. Meanwhile, the addition of CMV increased the content of DOC by 5.14–78.77 mg/kg and HCl extractable Fe (II) by 35.12–1221.03 mg/kg. Crop residues returning to soil increased the relative abundance of iron reductive and electroactive genera, as well as denitrifying genera with more copies of denitrification genes (Archangiaceae, Gemmatimonadaceae, and Burkholderiaceae). The synergistic effect of Fe-DOC complexation, electroactive genera, and denitrifying genera contributed to up-regulated expression of napA and narG (5.84 × 106 and 3.39 × 107 copies increased in the CMV soil compared to the control) numbers and equally accelerated reduction of nitrate to nitrite, while further nitrite reduction was primarily attributed to the abiotic reaction by Fe (II). From a bio-electrochemical point of view, this work provided new insight into the nitrate reduction of paddy soil impacted by Fe-DOC complexation.