The aim of this study was to determine the responses of nitrifiers and denitrifiers to understand microbial pathways of nitrous oxide (N2O) emissions in grassland soils that received inputs of sheep excreta. Sheep dung and synthetic sheep urine were applied at three different rates, simulating a single, double, or triple overlapping of urine or dung depositions in the field. Quantitative PCR and high-throughput sequencing were combined with process-based modeling to understand effects of sheep excreta on microbial populations and on pathways for N2O production. Results showed that emissions of N2O from urine were significantly higher than from dung, ranging from 0.12 to 0.78 kg N2O-N ha−1 during the 3 months. The N2O emissions were significantly related to the bacterial amoA (r = 0.373, P < 0.001) and nirK (r = 0.614, P < 0.001) gene abundances. It was autotrophic nitrification that dominated N2O production in the low urine-N rate soils, whereas it was denitrification (including nitrifier denitrification and heterotrophic denitrification) that dominated N2O production in the high urine-N rate soils. Nitrifier denitrification was responsible for most of the N2O emissions in the dung-treated soils. This study suggests that nitrifier denitrification is indeed an important pathway for N2O emissions in these low fertility and dry grazed grassland ecosystems.