AbstractTo evaluate the fate of N in an agricultural soil treated with an N‐rich industrial byproduct, fermentation residue was applied to Yalesville fine, sandy loam at a loading rate of 75 dry metric tons/ha, or 2,130 and 1,780 kg N/ha during 1975 and 1976, respectively. Treated and control plots were planted to soybeans (Glycine max L. Merr.) each year. The treated plots yielded 4,350 kg/ha of soybean grain compared with 3,600 kg/ha for the controls in 1975, and 4,100 kg/ha compared with 3,700 kg/ha in 1976. Yield enhancements attributable to fermentation residue application were significant (P = 0.05) each year despite the severe repression of nodulation on treated plants compared with controls.During the growing season, NO3−‐N accumulations >80 µg/g oven dry soil were observed in the top 5 cm of treated soil, compared with accumulations of 15 µg/g or less in the control. Further, elevated NO3−‐N levels were observed in the top 91 cm of treated soil throughout the fallow and growing seasons, when compared with control plots, suggesting that some of the applied N may have been transported to the water table as NO3−.Populations of five physiological groups of microorganisms closely mirrored soil levels of NO3−‐N and NH4+‐N in both experiments. Denitrifying bacteria reached population densities of 3.0 × 109/g oven dry treated soil compared with a maximum of 6.8 × 105/g for control soil during the growing season. Enhanced N transforming activity by microorganisms in soil receiving fermentation residue compared with the control soil was supported by the elevated populations of NH4+ and NO2− oxidizing bacteria, and NO3− reducing‐, denitrifying‐, and heterotrophic aerobic bacteria observed throughout the fallow and growing seasons. Although application of fermentation residue significantly increased soybean yields, the limited recovery of added N by the crop and the likelihood of substantial N losses suggest a reassessment of application rates or efforts to stabilize N applied to soils from fermentation residues.