Water management strategies are critical in regulating nitrous oxide (N2O) emissions from paddy soils under rice cultivation. Biochar is widely used as an amendment to decrease soil N2O emissions. However, the impacts of biochar amendment on N2O emissions under different water management strategies in paddy soils have not been investigated thoroughly, and the underlying mechanisms remain poorly understood. In particular, the effects of mid-season water drainage, a strategy used for water conservation, need to be better understood. In this study, a pot experiment was conducted including six treatments: alternating dry-wet conditions during the mid-season period without and with 2% (w/w) biochar (AWD1 and AWD2, respectively), continuous flooding during the mid-season period without (CF1) and with 2% (CF2) biochar, and regular mid-season drainage during the mid season period without (CON1) and with 2% (CON2) biochar. All treatments received inorganic nitrogen, phosphorus and potassium fertilizers (NPK) administered in a split application. We found that fluxes of N2O emission peaked after the two fertilizers’ additions. No significant difference in the first N2O flux peak was found among different treatments. There also was no difference in the second N2O flux peak in both CF treatments, whereas biochar addition significantly decreased the second N2O flux peak in AWD2 and CON2 treatments. This was mainly due to increased nosZ gene copies and decreased ratios of denitrification and amoA genes to nosZ gene copies. Biochar amendments resulted in significant stimulation of nifH gene copies in the AWD2 treatment. Lastly, biochar increased rice yields in all treatments. Our study suggested that AWD2 was the optimal management strategy for mitigating N2O emissions and improving rice production in this tropical paddy soil.