Land area devoted to sugarcane (Saccharum spp.) production in Brazil has increased from 2 million to 10 million ha over the past four decades. Studies have shown that, from an environmental perspective, the transformation of nitrogen (N) fertilizers into N₂O gases can offset the advantages gained by replacing fossil fuels with biofuels. Our objectives here were to review recent developments in N management for sugarcane-biofuel production and assess estimates of N use efficiency (NUE) and N losses based on future scenarios, as well as for life-cycle assessments of bioenergy production. Approximately 60 % of N-based fertilizer applied to sugarcane fields in Brazil is recovered by plants and soils, whereas N losses to leaching and N₂O emissions can average 5.6 and 1.84 % of the total applied N, respectively. Maintenance of trash, rotation with N-fixing legume species, and optimization of byproducts usage have potential for reducing the N requirements of sugarcane cultivation in Brazil. Moreover, the development of sugarcane genotypes with higher NUEs, along with management systems that consider soil capacity of mineralization, is required for improving the NUE of sugarcane. Strategies to maintain N as NH₄ ⁺ in sugarcane-cropped soils also have the potential to reduce N losses and enhance NUE. The development of second-generation biofuels is important for increasing biofuel production while simultaneously maintaining N rates and improving NUE, and sugarcane systems in Brazil show potential for sustainable biofuel production with low N rates and limited N₂O losses. Reducing N rates in sugarcane fields is thus necessary for improving sugarcane-based biofuel production and reducing its environmental impacts.