Soil applications of recalcitrant biochar offer the possibility of mitigating climate change effects through long‐term carbon sequestration and potentially also by reducing emissions of the potent greenhouse gas nitrous oxide (N2O). This laboratory study examined the effect of combining a fast‐pyrolysis biochar at small (1% by mass) and large (3%) concentrations with anaerobically digested slurry on soil N2O and carbon dioxide (CO2) emissions over a period of 55 days. The results showed that fast‐pyrolysis biochar applied on its own increased N2O emissions from soil. However, when biochar was applied together with slurry, the larger biochar concentration decreased N2O emissions by 47%, relative to those from the slurry treatment with the smaller biochar concentration. Reduced N2O emissions coincided with enhanced soil microbial activity and immobilization of nitrogen. A combined application of biochar and anaerobic digested slurry could therefore be beneficial for cropping systems in terms of soil nitrogen retention while concurrently mitigating N2O fluxes and sequestering carbon in soil.