AbstractThe impact of external poly‐γ‐glutamic acid (γ‐PGA) on soil nitrogen (N) transformation and distribution remains unclear, despite its contrasting effects on N use efficiency. Therefore, soil culture and soil column experiments were conducted using three different γ‐PGA addition rates (0%, 4% and 8% of dry soil weight, w/w) under different soil water contents (40%, 60% and 80% of field water capacity) and dry–wet cycles (0, 2, 4 and 8 times cycles; a single dry–wet cycle involved reducing soil water content from 80% to 40% of field water capacity) in sandy loam soil. The results of soil culture experiment showed that the γ‐PGA significantly increased soil –N and –N contents, as well as nitrification and transformation rates. However, these effects were observed to be influenced by both the culture time and soil water content. In addition, the results of soil column experiment showed that γ‐PGA not only significantly enhanced the soil inorganic nitrogen content within the 0–20 cm soil layer, but also improved water retention capacity. However, the differences between the γ‐PGA treatments gradually diminished with an increase in dry–wet cycle times. These results indicate that γ‐PGA addition enhanced soil inorganic N content and soil water retention by influencing soil N transformation and water distribution. However, the impact of γ‐PGA addition on soil improvement was regulated by soil water content, which should be taken into full consideration in agricultural practices.