Ruminant urine patches in grazed grasslands significantly change the chemical and biological properties of the affected soils due to the predominance of urea within ruminant urine and the high rates deposited onto pastures. The net result is the loss of reactive N (Nr) but little is known about the gross N transformation rates leading to Nr losses or the long-term fate of urine-N in pasture soils. Using data from a previous incubation study, that simulated ruminant urine application by applying 15N-urea, we investigated the effects of differing soil moisture regimes on gross soil N transformation rates, including urea hydrolysis and ammonia (NH3) formation. Gross transformation rates were quantified using a 15N tracing tool ‘NtraceBasic’ that was extended with a urea submodel. The new model (NtraceUrea) matched the measured data well (NH4+, NO3− concentrations and their respective 15N enrichments over time). Soil moisture affected urea hydrolysis dynamics and was postulated to regulate the magnitude of the NH3 dynamics due to constraints on gas diffusion under wetter (−1 kPa) soil conditions. Under drier soil conditions (−10 kPa) sorption and release of NH4+, the movement of NH4+ into and out of the soil labile N pool, the movement of NO3− into and out of the soil recalcitrant N pool, and the mineralisation of the recalcitrant N pool were all enhanced relative to −1 kPa, as were the gross N transformation rates in general due to the high urea N rate applied. This study shows that the time required for soils to re-establish equilibrium following urea deposition is substantial, and provides an explanation for the long-term 15N recoveries observed under ruminant urine patches in soils. The results highlight future research directions including the need to understand the potential role of NH3 in contributing to the recalcitrant N pool.