To remediate arid and low fertility soil and explore the feasibility of controlling its carbon (C) and nitrogen (N) emissions, algal-bacterial aerobic granular sludge (AGS) was applied as soil additives and compared with bacterial AGS and cyanobacteria during 14 days’ incubation. Results show that algal-bacterial AGS as additives possesses a higher potential in terms of fertility recovery and soil physicochemical properties conservation. The additives may change the soil characteristics by decreasing soil pH (within 0.6) and water content (0.8–2.5 %) with increased electrical conductivity during the 14 days’ incubation. As for soil fertility, due to the high available phosphorus (P) content in algal-bacterial AGS, the soil available P content was significantly increased from 50 % to 170 % after incubation under different application rates or gaseous environments. N was also accumulated in the soil matrix with increased inorganic forms and less or acceptable N emission. The contents of soluble organic substances and extracellular polymeric substances (EPS) were significantly increased after incubation. Under ambient air and moderately elevated CO2 like 10 % conditions, carbon mineralization in the soil samples was lower than 15 % at low additives dosages; while under an elevated CO2 content (25 %) condition, a higher additives dosage may cause a rapid CO2 accumulation within 2 days with a substantial O2 consumption, leading to an anaerobic/anoxic environment corresponding to a higher C mineralization and/or N loss.