Abstract Biosolids management can affect N gaseous losses, and may be an important tool for sludge N management. The objectives of our experiment were to determine the effect of dicyandiamide (DCD) addition and biosolids placement on (i) ammonia volatilization, and (ii) C mineralization and inorganic N accumulation. Biosolids, treated or untreated with DCD, were either surface‐applied or soil‐incorporated at a rate of 31.7 g of dry solids kg−1 soil, and incubated in flasks at 21°C for 62 d. Free air was renewed at 0.15 L min−1 and NH3 and CO2 in the air flowing out of each flask were collected in traps for each treatment. Inorganic N in soil plus biosolids mixtures was determined at the end of the study. Surface‐applied biosolids treated with DCD lost 71% while nontreated biosolids lost 20% of the applied NH+4‐N. Soil‐incorporated biosolids lost <5% of the applied NH+4‐N. Surface placement of the biosolids enhanced C mineralization, while it did not affect inorganic N accumulation. Addition of DCD to the biosolids did not affect C mineralization, but increased the accumulation of inorganic N. These results suggest that addition of DCD and biosolids placement can be used for managing sludge N.