The application of organo-mineral fertilizers (OMFs) is gaining popularity day by day because of their potential effect on crop productivity and soil fertility enhancement. Therefore, this research was conducted to observe the effect of a peat soil–urea (PSU) fertilizer on baby corn yield, quality, nitrogen (N) use efficiency, and soil quality compared with commercial urea. A completely randomized design (CRD) with four replicates was used to set up the experiment. In this trial, N was applied from three sources, viz., urea, PSU-L (low N = 15%), and PSU-H (high N = 25%) at a rate of 50, 75, and 100% of the recommended N application dose. The growth, yield, quality, and N use efficiency of baby corn were significantly impacted by the application of PSU fertilizer to the soil. Substantially higher leaf chlorophyll, cob vitamin C, and protein content were found in PSU-treated plants compared with commercial urea. The application of PSU produced about 21% higher cob and a 14% fodder yield over commercial urea. On average, the N uptake by baby corn was 22% higher in PSU-treated plants than urea-treated plants, resulting in 24 and 33% higher N use efficiency and fertilizer N use efficiency, respectively, in PSU than commercial urea. Therefore, the N application rate could be reduced by around 30% using PSU as an alternate N source compared with using commercial urea. In addition, the application of PSU to soil substantially increased the soil organic carbon (SOC) content, whereas SOC decreased in urea-treated soil.