Tropical and subtropical acidic soils are hotspots of global terrestrial nitrous oxide (N2O) emissions, with N2O produced primarily through denitrification. Plant growth-promoting microbes (PGPMs) may effectively mitigate soil N2O emissions from acidic soils, achieved through differential responses of bacterial and fungal denitrification to PGPMs. To test this hypothesis, we conducted a pot experiment and the associated laboratory trials to gain the underlying insights into the PGPM Bacillus velezensis strain SQR9 effects on N2O emissions from acidic soils. SQR9 inoculation significantly reduced soil N2O emissions by 22.6–33.5 %, dependent on inoculation dose, and increased the bacterial AOB, nirK and nosZ genes abundance, facilitating the reduction of N2O to N2 in denitrification. The relative contribution of fungi to the soil denitrification rate was 58.4–77.1 %, suggesting that the N2O emissions derived mainly from fungal denitrification. The SQR9 inoculation significantly inhibited the fungal denitrification and down-regulated fungal nirK gene transcript, dependent on the SQR9 sfp gene, which was necessary for secondary metabolite synthesis. Therefore, our study provides new evidence that decreased N2O emissions from acidic soils can be due to fungal denitrification inhibited by PGPM SQR9 inoculation.